Liz Truss does not want to provide more direct help for everyone to pay energy bills if she becomes prime minister according to her allies, despite warnings millions face a “catastrophe” this winter.
The foreign secretary, who is the clear frontrunner to take over as prime minister on September 6, has promised “decisive action” to help with the cost of living crisis.
From October people will receive £400 off their energy bills in six instalments, a policy introduced by Rishi Sunak when he was chancellor.
But according to the BBC, Truss has “ruled out” building on that approach with more help that would see people receive direct assistance regardless of their wealth. Truss’ campaign did not reject the report when asked.
According to The Sunday Telegraph, Truss could instead cut 20% headline rate of VAT could by up to 5% or cut to income tax.
Sunak’s campaign has said cutting VAT would be “incredibly regressive” and help the richest more than the poorest.
Truss has not set out details of her plans, with a campaign source saying it would be wrong to make commitments before she is elected prime minister or pre-empt the so-called fiscal event - in which her proposals will be formally announced - expected in mid-September.
Nadhim Zahawi, the current chancellor and Truss supporter, has suggested people earning as much as £45,000 per year could be among those struggling to cope with soaring living costs.
Energy regulator Ofgem warned the government on Friday that it must act urgently to “match the scale of the crisis we have before us” as Britain faced the news that the average household’s yearly bill will rise from £1,971 to £3,549.
Martin Lewis, the well regarded consumer expert, has warned there is a “genuine social and financial catastrophe that is putting lives at risk”.
Pat McFadden, Labour’s shadow chief secretary to the Treasury, said on Sunday people faced a financial “shockwave” and repeated his party’s call for bills to be frozen for six months..