(Bloomberg) — The UK government is preparing targeted support to help lower-income households with soaring energy bills as oil prices, fueled by the Iran war, exceed $100 a barrel.
The Treasury is considering several options to help the most vulnerable cope with rising gas and electricity prices when the current energy price cap ends in June, Chancellor of the Exchequer Rachel Reeves told the Times in an interview.
A universal bailout for every household — similar to that announced by Liz Truss after Russia’s invasion of Ukraine in 2022 — would be unaffordable given Britain’s high levels of debt, Reeves said.
Prime Minister Keir Starmer’s government is under pressure from unions and Labour members of parliament to offer a support package in the event of a prolonged conflict in the Middle East.
Reeves is expected to provide more details next week, including measures aimed at households that rely on heating oil, which isn’t covered by the price cap on domestic heating and power bills.
“I have found the money and we’ve worked through with MPs and others a response for people who are not protected by the energy price cap,” Reeves told the FT. “We’re giving greater support to those who really need it.”
Reeves said Treasury officials were looking at various scenarios, depending on how long the Iran conflict lasts and its longer-term impact on wholesale energy prices.
“We still have some time, and through the Iran response board — a group of Treasury ministers and officials — we are working through different approaches we could take, including more targeted options,” she said.
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