Boris Johnson is not expected to slash VAT on energy bills for households despite the mounting cost of living crisis for struggling families, a Treasury minister has suggested.
Chief Secretary to the Treasury Simon Clarke said it is "not something we are leaning towards" after being pressed on calls to help struggling households.
Mr Clarke said the Government would keep all options under review but dampened hopes of a move, as he said it was "not a well targeted measure".
Labour has been calling for VAT to be cut from energy bills, which are set to soar in April when the price cap rises.
It comes amid mounting unrest among Tory MPs over the planned National Insurance rise, which is due to come into force in April.
The Prime Minister and Chancellor Rishi Sunak wrote a joint article in the Sunday Times at the weekend insisting that the manifesto-busting tax hike would go ahead.
Mr Clarke said it would be a "huge gamble" to instead pay for the measures through borrowing, rather than a tax rise.
And he suggested that calls for a VAT cut for energy bills would not go ahead.
He told BBC Radio 4's Today programme: "We genuinely do look at all the options that are open to us, and of course this is one of them now we have left the European Union.
"But... if you go with a blanket cut in VAT, then the risk is that the benefit of that accrues disproportionately to the wealthiest in society, because they will tend to have larger homes, larger energy bills, and will therefore reap the disproportionate benefit from such an intervention.
"We would rather target our support more closely to need."
He added: "I'm not ruling it out, but I am saying that is not something that at this moment in time we are leaning towards, because we don't think it is a well-targeted measure.
"We keep all our options under review though, and so that is not to say we will not act in this space, but we do need to make sure that when we do act - if we do act - that we get it right, because this is billions of taxpayers' money that needs to go where it is most needed."
Mr Johnson told broadcasters that the Chancellor is "looking" at how to "abate energy costs".
Speaking during a visit to Tilbury in Essex, the PM said: "We all understand the pressures that the cost-of-living crunch is putting on people and it is being driven by the inflation you are seeing around the world, particularly in energy costs.
"So, we're going to be bringing forward ... I know the Chancellor is looking at a package of things to abate energy costs.
"That is on top of all that we are doing to try and support people through this post-Covid recovery phase. What we are really seeing is the stresses and strains of the global economy fuelling inflation in the post-Covid recovery phase."
It comes as former Brexit minister Lord Frost quashed rumours he could return to No10 due to his anger at the National Insurance hike.
Mr Johnson is expected to sack staff following the publication of Sue Gray's long-awaited partygate report - with chief of staff Dan Rosenfield in the firing line.
But Lord Frost said he would not be returning to Downing Street to plug the gap.
"The PM's chief of staff & No10 team must be fully committed to delivering the Government's agenda. They can't have agendas of their own or disagree with government policy," he tweeted.
He warned that "policy change is needed if the Government is going to succeed", adding: "In particular I don't support the decision this weekend to proceed with tax increases, so obviously I could not return to help implement it."
