The claim that the Conservatives' Cheap Power Plan is "fully funded" is a self-assertion by the Conservative Party that faces significant challenges from independent evidence. **The plan's costs and revenue losses:** - Abolishing VAT on household energy bills for 3 years costs approximately £2.2–2.5 billion per year in foregone revenue (~£7 billion over 3 years), per multiple analyses. - Repealing the Energy Profits Levy (EPL) would *reduce* government revenue. The EPL raised £2.9 billion in 2024/25, according to the House of Commons Library. This is a revenue loss, not a saving. - Scrapping the UK Emissions Trading Scheme (ETS) and Carbon Price Support (CPS) also removes government revenue. The IFS notes CPS revenue was forecast at ~£200 million/year by 2028-29, and the UK ETS generates additional revenue. **The Conservatives' claimed funding sources:** - Scrapping green energy subsidies/levies: ~£1.6 billion/year (per the party's own website). However, the BBC reports the government has already committed to funding 75% of the Renewable Obligation scheme through general taxation until 2028-29, meaning some of these savings are already accounted for in current fiscal plans. - Additional North Sea tax receipts: The Conservatives estimate ~£2.5 billion/year. This is directly contradicted by OBR forecasts, which show total UK oil and gas revenues (including EPL) declining from £2.7 billion in 2025-26 to £0.1 billion by 2030-31 due to declining production. The Conservatives' estimate appears to assume that expanding production will increase revenue even while simultaneously repealing the EPL (which cuts the tax rate from 78% to ~40%), an assumption the OBR's own modelling does not support. **Independent analysis:** - The Oxford Smith School of Enterprise and the Environment found that even maximising North Sea extraction and redistributing ALL tax revenues directly to households would save only £16–£82/year — far less than the £200 claimed. If the EPL is scrapped, the savings drop to just £16/year. - No independent fiscal body (OBR, IFS) has verified the plan is "fully funded." The IFS has been broadly skeptical of Conservative fiscal claims, describing similar past plans as "definite giveaways paid for by uncertain, unspecific and apparently victimless savings." - BusinessGreen noted the Conservatives did not explain how they would pay for outstanding Renewables Obligation Certificate (ROC) payments if removed from bills. - Friends of the Earth noted that the ETS cannot be unilaterally scrapped without EU agreement (it's part of the UK-EU Trade Deal), and scrapping CPS alone saves households only ~£15/year. **Assessment:** The plan does identify some genuine savings from scrapping green levies and carbon taxes. However, the claim that it is "fully funded" is undermined by three major problems: (1) repealing the EPL *reduces* revenue by billions, (2) the £2.5 billion/year North Sea revenue projection is contradicted by OBR forecasts showing declining production and revenue, and (3) the VAT cut alone costs ~£2.2–2.5 billion/year with no clearly identified offset. No independent fiscal authority has verified the costing. The net effect appears to be a plan that costs more in foregone revenue and repealed taxes than its claimed savings and projected new revenues can cover, based on the best available independent forecasts. Sources: BBC News — "Remove VAT from energy bills for three years, Tories urge" (https://www.bbc.com/news/articles/c4gx01d0re1o); Conservative Party — "Our Plan to get Britain back on Track" (https://www.conservatives.com/our-plan-for-britain); OBR — "Oil and gas revenues" (https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/oil-and-gas-revenues/); House of Commons Library — "Taxation of North Sea oil and gas" (https://commonslibrary.parliament.uk/research-briefings/sn00341/); IFS — "Temporary VAT cut on household electricity bills: IFS response" (https://ifs.org.uk/articles/temporary-vat-cut-household-electricity-bills-ifs-response); IFS — "Response to scrapping of Carbon Price Support" (https://ifs.org.uk/articles/response-scrapping-carbon-price-support); Oxford Smith School / The Conversation — "Would more North Sea drilling lower UK energy bills? Our analysis says no" (https://theconversation.com/would-more-north-sea-drilling-lower-uk-energy-bills-our-analysis-says-no-278467); The Standard — "'Sheer fantasy' to claim draining North Sea oil would cut bills – experts" (https://www.standard.co.uk/business/business-news/north-sea-government-donald-trump-iran-b1275180.html); New Civil Engineer — "Conservatives launch campaign to expand North Sea production" (https://www.newcivilengineer.com/latest/conservatives-launch-campaign-to-expand-north-sea-production-but-face-backlash-31-03-2026/); BusinessGreen — "Conservatives vow to scrap UK carbon tax" (https://www.businessgreen.com/news/4519999/conservatives-vow-scrap-uk-carbon-tax-climate-policy-turn); Friends of the Earth — "Fact check: Why are our energy bills so high?" (https://policy.friendsoftheearth.uk/insight/fact-check-why-are-our-energy-bills-so-high); WooSee — "It's the Gas, Not the Tax: Why the Conservative Cheap Power Plan Won't Lower Bills" (https://woosee.pro/en/conservative-cheap-power-plan-gas-not-tax/); LBC — "Business Secretary hails energy bills tax cut despite concerns over funding" (https://www.lbc.co.uk/article/energy-bills-business-secretary-unfunded-tax-cut-5Hjddwq_2/); The Guardian — "Scrapping North Sea windfall tax would not reduce UK energy bills, experts say" (https://www.theguardian.com/business/2026/mar/10/north-sea-windfall-tax-rachel-reeves-uk-energy-bills-experts)