To offer targeted help through the welfare system will leave out middle-income households, who are also hit “really hard” by soaring energy bills, the UK’s finance minister said on Friday.
Chancellor of the Exchequer Nadhim Zahawi said he’s working “flat out” to come up with options for the next prime minister, who is due to take office in 10 days.
It comes as British households face an 80 percent hike in energy prices from October, with the bill set to swell further next year.
“If you are a senior nurse or a senior teacher on £45,000 a year, you’re having your energy bills go up by 80 percent and will probably rise even higher in the new year. It’s really hard,” he said.
“If you’re a pensioner, it’s really hard. So Universal Credit is a really effective way of targeting, but I’m looking at what else we can do to make sure we help those who really need the help.”
The newspaper said he refused to rule out freezing the energy cap as suggested by Labour, insisting “nothing is off the table.”
But he said: “My concern about it is that it is universal. You’re helping wealthier households, households like mine, where we can withstand the additional pressure of high energy costs, and that takes away from your ability to be resilient over the long term.
“It would be about £100 billion in about 18, 24 months. If I targeted that help, I’d be able to deliver more help to the most vulnerable.”
He told broadcasters that the government is sending “£37 billion to people to help them for now, and then more will be coming,” but added: “The reality is that we should all look at our energy consumption. It is a difficult time. There is [a] war on our continent,” referring to Russia’s invasion of Ukraine.
Conservative leadership contender Liz Truss on Thursday wrote in the Daily Mail that she will “provide immediate support” upon entering Downing Street, despite in the past insisting she was focused on tax cuts rather than “handouts.”
Her rival Rishi Sunak has already said he will provide additional support targeted at the most vulnerable.
Nick Butler, former vice president of BP who worked for the oil giant for more than 30 years, told BBC Scotland’s The Seven that he didn’t believe Ofgem should have raised the cap on Friday with no “modification or mitigation.”
Butler said he would like to see a cost breakdown of every company in the industry to see if increases were justifiable.
“I don’t think the cost of producing nuclear or renewable have risen in any way comparable to the increases in natural gas,” he said.
Butler said he believes some companies are facing a real rise in costs, but others are “milking the system,” telling the broadcaster that companies like BP should face a tax hike if “they can’t show they are facing real costs in bringing the supplies in.”
