UK households could face paying billions more in energy bills to cover green subsidy costs that were not disclosed in the Chancellor's Budget last week.
The Office for Budget Responsibility (OBR) revealed in its latest economic assessment that £1billion a year will be added to consumer energy bills to fund Ed Miliband's next renewables auction, known as Allocation Round 7 (AR7).
The projected costs were not mentioned in Rachel Reeves's speech but instead appeared in a footnote to the OBR's Fiscal Outlook.
The disclosure raises further questions over Ms Reeve's claims that Labour is easing the cost of living crisis, and comes amid a dispute between the Chancellor and the OBR over the accuracy of her statements on public finances ahead of the Budget.
The OBR’s figures relate to contracts for difference (CfDs), the system that adds levies to household bills to subsidise green energy projects.
It forecasts CfD costs are set to rise from £2.3billion in 2024-2025 to £4.6billion by 2030-2031. However, it warned that the Treasury’s estimates excluded an additional £5billion for AR7 and subsequent subsidy rounds.
It said: “These [figures] exclude future auction rounds, including AR7 for which outcomes are expected in early 2026.
“This is expected to auction CfD contracts up to £1billion a year (in 2025 prices) between 2028-2029 and 2032-2033.”