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Chancellor: Next PM can hit the ground running to offer extra energy bill help

Chancellor Nadhim Zahawi said Treasury officials are looking at options to help hard-pressed families (Liam McBurney/PA)
Chancellor Nadhim Zahawi said Treasury officials are looking at options to help hard-pressed families (Liam McBurney/PA)

Chancellor Nadhim Zahawi believes the next prime minister can “hit the ground running” to help hard-pressed families, as the latest warning suggested energy bills could top nearly £5,300 by the spring.

Mr Zahawi insisted his officials in the Treasury are “looking at all the options” for additional help this winter to ensure either Liz Truss or Rishi Sunak have the necessary information to take decisions from September 5.

Work and Pensions Secretary Therese Coffey also sought to downplay fears over energy prices, claiming they will be “nothing near” the forecasts.

Conservative leadership bid
Work and Pensions Secretary Therese Coffey (Kirsty O’Connor/PA)

Auxilione’s forecast released on Friday predicted the price cap on energy bills could reach £3,628 in October, from £1,971 today. They add it could then rise again to £4,538 in January and peak at £5,277 in April.

The worst forecast yet comes just 24 hours after Auxilione said regulator Ofgem could be forced to raise the price cap for the average household to £5,038 from next April.

Increases to the price of gas and electricity on wholesale markets are worsening the predicted rises for the cap, but they will fall if energy prices decrease.

Mr Zahawi told Sky News: “My message to families today is: we will have those options ready to go.

“Yesterday I met with the industry to look at what more we can do with the industry on direct debit, on pre-payment meters, all the things that families are worried about, we’re making sure we’re doing the work so on September 5 the new prime minister can hit the ground running and get those things into place.”

Asked if extra direct grants to families this winter are inevitable, Mr Zahawi said: “We’re looking at all the options of what additional help we can deliver for families to get them through the winter – £37 billion, we’re midway through that actual delivery.”

Mr Zahawi, questioned about the future of the energy price cap amid concerns it is not protecting consumers, said: “It continues to help protect consumers, but the reason I brought the industry in yesterday was to look at where there is market failure, where can we help more that would actually bring the energy price cap down.”

He added: “The reason the industry came in yesterday partly was to say: ‘Okay, what can we do together if there is market failure for us to bring pressure down on the energy price cap?’

“And there were material suggestions that we’re working up now ready for the new prime minister on that.”

Ms Coffey also told ITV’s Good Morning Britain: “Just like happened in May, we waited for Ofgem to come out with the formal changes on what might happen to energy prices or what would happen with the price cap.

“All the figures I have seen do not in any way suggest an average energy bill next year of £5,000, nothing near like that.”

Ms Coffey added: “Nevertheless, Government is preparing now … for options to be considered and, as I say, we will take the necessary steps including, if necessary, new primary legislation which we would need to undertake.”

Both Ms Truss and Mr Sunak have been repeatedly challenged on the help they plan to provide if they replace Boris Johnson as Conservative Party leader and prime minister.

Former chancellor Mr Sunak has said he is prepared to find up to £10 billion of extra support – with a vision to cover the total cost for up to 16 million vulnerable people, according to The Times.

It said he valued his cut to VAT on energy at £5 billion, and would find the same amount again to go towards helping the most in need, as he warned: “You can’t heat your home with hope.”

Ms Truss has stood by her tax-cutting plans, saying it is her “first preference” before considering other measures.

The Foreign Secretary has hinted she would consider further support for struggling households, but insisted she will not “write the Budget in advance”.