Chancellor Nadhim Zahawi has insisted “nothing is off the table” when it comes to action on soaring energy bills – although he also insisted a freeze in the price cap would not deliver “targeted help” for those who need it most.
With bills due to rise again, the Treasury is currently “working up options” to support households as their finances come under further strain.
This will allow the new prime minister to “hit the ground running” when the come into Downing Street on September 5, the Chancellor said.
His comments came as he accused Russian President Vladimir Putin of using “energy and gas as a tool against the British people because of the help we’re giving to Ukraine”.
Supply issues linked to Russia’s invasion of Ukraine are one reason behind rapidly rising power bills – with recent warnings suggesting the average amount UK households pay for their gas and electricity could reach £6,000 next year.
In the wake of that, Scotland’s First Minister Nicola Sturgeon has been calling for action, insisting the UK Government must not wait until a successor to Boris Johnson is elected to intervene.
She hosted a summit with energy companies and consumer groups on Tuesday, saying afterwards that there was a “consensus” that a freeze in the price cap is needed.
Ms Sturgeon stated: “Effectively, we’re calling for an energy bills freeze, and then an arrangement to be put in place to fund that over a much longer period of time.”
The energy price cap – which limits the amount domestic customers have to pay – is expected to rise to more than £3,500 from October, with an announcement on the new limit due on Friday.
The Chancellor insisted that “essentially nothing is off the table” but added that “we need targeted help for the families who need it most”.
A freeze in the price cap would help all households, including wealthier families who may “not necessarily need the help as much as those whose funds are really stretched”.
Speaking to STV News about the prospect of a price cap freeze during a visit to Edinburgh, Mr Zahawi said: “My issue is with it is it would help wealthier households.
“If you try and spread the help to every household you are not targeting those who really need it.”
He questioned: “Is it a good strategy to help wealthier households when they can afford essentially to pay more for their energy at the moment or is it better to target it and make it last longer, so that we have that ability to continue to help those families that need the help.”
The idea of a freeze in the price cap was initially pitched by Keith Anderson, the chief executive of energy firm Scottish Power, Mr Zahawi stated.
The Chancellor said: “He made the pitch two weeks ago, nothing is off the table.”
With his predecessor Rishi Sunak battling Liz Truss to become the next Tory Party leader and new prime minister, Mr Zahawi said the Treasury was “working up options so that the incoming prime minister can hit the ground running on September 5.”
He insisted: “The right thing to do is to have all those options on the table for the incoming prime minister and to target help for those families who need it.
But he insisted that the Russian President was “deliberately using” energy prices in retaliation for the UK’s support for Ukraine.
The Chancellor stated: “Putin has worked out he can use energy and gas as a tool against the British people because of the help we’re giving to Ukraine.
“I need to make sure that every pound is targeted and is stretched as far as we can make it while we continue to support Ukraine in their battle against Putin.”
