Wednesday 21 September 2022

Who’s set to benefit from energy cap spending?

Who’s set to benefit from energy cap spending?

With an estimated £150 billion set to be spent during the next two years to cap energy costs, the British taxpayer deserves to know where that money is going.

That’s the claim of researchers from Cambridge Judge Business School, who ask the question of where the money will go directly and who this will impact.

The paper warns that if more is revealed on which energy companies receive payments, there would likely be a call form the public for further taxation on the industry.

It states: “We should be able to see where profits are being made in the energy value chain and whether this is stimulating beneficial long-term investment in the UK energy sector.”

Although the energy situation is unprecedented and consumers will benefit from the Prime Minister’s price cap, the paper stresses: “We must not lose sight of the fact that recipients of the subsidies paid to the energy industry will also benefit.”

After many energy companies have seen excessive profits, the public would not be pleased to see their taxes accommodate further benefits, the researchers allege.

They call on the National Audit Office and Ofgem for involvement in “monthly monitoring of these expenditure flows in the gas and electricity markets.”

Ofgem responded: "It’s been clear to Ofgem and the government since we announced the new price cap that the new government would have to act urgently and decisively to support consumers and this package of support will be welcomed by millions across Britain."

The National Audit Office stated it "welcomes suggestions for areas to investigate and takes into account a wide range of views to decide what work to carry out and how to report it to Parliament.

"We are currently considering our options of how to support Parliamentary scrutiny of the government’s response to rising energy bills."

Written by

Bruna Pinhoni

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