Households facing challenges with escalating energy costs may receive targeted assistance, as suggested by Rachel Reeves.
The Chancellor pledged to offer aid “to those in genuine need,” with a support package for individuals reliant on heating oil – a sector not covered by the energy price cap – anticipated to be unveiled next week.
This initiative comes amidst concerns about the impact of the Middle East conflict on prices, with heating oil prices doubling since the crisis began.
In an interview with The Times, Ms. Reeves hinted at the upcoming announcement of a subsidy program next week.
She stated, “I have secured the necessary funds and, in collaboration with MPs and other stakeholders, devised a plan to assist individuals not protected by the energy price cap. We are increasing support for those most in need.”
Analysts at Cornwall Insight have projected a potential 10% increase in household energy bills from July due to significant spikes in wholesale gas prices. This could raise Ofgem’s price cap for July to September to £1,801 annually for a typical dual fuel household – a £160 or 10% surge from April’s cap.
The Chancellor mentioned, “We have time, and we are exploring various approaches within the Iran response board (a team of Treasury ministers and officials), including more targeted solutions. We are evaluating different scenarios presently, and I am cautious about committing to actions beyond our capacity. Given our substantial debt inherited, I am keen on exploring all available options.”
She downplayed the likelihood of a universal energy bailout for households similar to the one following Russia’s invasion of Ukraine, which cost around £35 billion over six months. Ms. Reeves emphasized the importance of fiscal discipline, especially during economic upheavals.
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