The Energy Price Guarantee may cost much less than is feared

Critics of ‘Trussonomics’ – and there are many – have been quick to claim that the new energy price plan puts its economic credibility at risk. Indeed, early estimates suggested that the ‘Energy Price Guarantee’ could cost the taxpayer £150 billion or more over two years, making it the most expensive economic policy in history. More than the furlough scheme, more than even the bank bailouts. Fortunately, the bill looks like it will be a lot smaller and sceptics are set to be proved wrong.

The Prime Minister proposes to cap the unit price of energy for households for two years, starting next month, with the government compensating suppliers for any additional costs. Similar support has been offered to businesses and other energy users (such as schools) for an initial period of six months.

Let’s be clear: it’s a massive state intervention in the markets which will subsidise the energy bills of every consumer regardless of need.