UK billpayers may pick up tab for green levies as energy price cap ends

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Consumers are in line to pay an extra ?170 in green levies as the government’s energy price cap comes to an end for most billpayers.

John Glen, the chief secretary to the Treasury, said on Sunday that ministers were considering what to do about the levies, which the government has paid since last year and are designed to fund schemes such as subsidised home insulation.

As part of the energy price guarantee announced by the former chancellor Kwasi Kwarteng last year as part of the government’s response to spiralling energy bills, the Treasury temporarily removed the levies from customer bills and paid them out of taxpayer revenue instead. At the time they were worth ?150 per household, but are now worth around ?170.

Since then, however, energy prices have fallen below the level set by the price guarantee, and as a result households without prepayment meters will from 1 July no longer benefit from the government discount. Once the cap is removed, green levies once more fall to billpayers rather than the Treasury.

The Telegraph first revealed on Sunday that green levies were due to shift from the taxpayer to consumers.

Glen told Sky News on Sunday: “We are making assessments all the time of how we can deal with the challenges of supply across the UK and the different input costs. I can’t confirm those this morning, but we are looking carefully at everything. The chancellor will be meeting with regulators next week.”

He added: “All decisions are looked at in terms of what we can do to make the situation better whilst continuing to recognise that halving inflation has to remain our priority.”

The news sparked an angry response from Jacob Rees-Mogg, who was the business and energy secretary when the temporary removal was announced last year. He told the Telegraph: “Any new or re-imposed charge ought to be announced to parliament first and not slipped through slyly.”

Households will not, however, have to pay an additional ?120 levy to help fund hydrogen fuel projects. The energy bill contained a clause which allowed ministers to impose such a levy to help fund lower-carbon energy projects as part of the UK’s move to net zero.

Grant Shapps, the energy secretary, told the Telegraph on Saturday however that he had decided not to impose the extra cost. “I don’t want to see people’s household bills unnecessarily bashed by this,” he said.