Brits struggling to pay energy bills to get 'more help' minister says ahead of potential £500 payouts to millions

BRITS who are struggling to pay soaring energy bills are set to get "more help" from the Government, a senior minister declared today.

Business secretary Kwasi Kwarteng confirmed No 10 is looking at giving millions of families one-off £500 payments.


But he added people will have to wait until March for an announcement when Chancellor Rishi Sunak makes his budget Spring Statement.

The Sun revealed yesterday how Whitehall officials are mulling the US-style scheme due to growing fears over rising inflation.

Energy bills are set to soar by an average of £600 in April when the Government's price cap is reset at a higher level.

And experts have warned tariffs could balloon by £1000 by the end of the year because of soaring wholesale gas prices.

That could see the average energy bill in Britain double to more than £2,200 ahead of next winter.

Mr Kwarteng suggested that the Treasury will provide more support for struggling families to heat their homes.

He said: "We're always looking at ways in which we can try and soften price rises, undue hikes in bills.

"We're looking at ways that can provide more help, and I'm sure there will be more information about that in the next few weeks.

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The business secretary said officials are locked in talks about "trying to work out the best way to deal with what is a really, really serious problem".

Asked about the idea of £500 payments, he said: "Lots and lots of things have been discussed. I'm sure that's one of the things we've been talking about."

Labour is urging the Government to scrap VAT on fuel bills now Britain has left the EU, which would save families £200 a year on average.

But the PM is resisting those calls and favours an approach which targets support at the poorest families who need it most.

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Ministers are looking at expanding the Warm Home Discount, which is giving some families £140 off their electricity bills this winter.

Experts at the Social Market Foundation have backed the idea of a one-off £500 payment.

But insiders say it's technically hard to write virtual cheques for millions of people, and there's no mechanism to do it.

MPs have called on the PM to slash VAT on bills or ditch green levies which can add hundreds of pounds onto the average bill.

But the Chancellor has insisted any help must target the poorest Brits and not be a bung for the rich.

The Treasury is understood to be looking at whether a one-off cash payment to a certain number of Brits on low incomes might be a better alternative.

The system would be similar to when former US President Donald Trump made direct payments of hundreds of dollars to every person in the US during the Covid crisis.

Expert backing

But it's understood that it would be complex to do the same here, as there isn't a simple system in place to make such payments.

A Treasury source told The Sun: "Ministers are looking at ways we can help to support households in the short term – particularly for those who need it most.

"There is no easy or perfect way to do this.

"A variety of options are being looked at and as always we will keep the policies we have in place under review."

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It was reported last week that the Government could step in to cover the costs too – with energy bills being paid for.

Dr Aveek Bhattacharya, the chief economist of the Social Market Foundation, backed the Chancellor to "write millions of cheques" of up to £500 each.

Those on lower incomes not paying higher rates of tax should get £300, and those on Universal Credit or benefits should get another £200, he suggested.

But they should be staggered over a few months to avoid causing a bigger inflation spike.

And a one-off payment would avoid tying the Chancellor down to ongoing extra costs year on year, he argued.

The think tank even dubbed the plan “Rishi’s COLA (Cost of Living Assistance)” and said it could bear the Chancellor’s signature.

Dr Bhattacharya said: “The coming cost of living crisis leaves millions of households facing severe hardship, and many millions more feeling significant pressure on their finances.

"It is clear that some action is needed, but the Government should avoid the temptation to over-complicate its response and muddle its environmental objectives by subsidising energy.

"Instead, it should make direct cash payments to households and leave them to figure out how best to address their needs.

"A ‘cost of living bonus’, with a higher payment for those on low incomes, would do a lot to help struggling families and clearly demonstrate that the Government is on their side.”

Belt tighteners

By Sun Reporter

PEOPLE are tightening their belts in the face of soaring inflation and fuel bills and expected interest rate hikes.

Shoppers’ confidence in the economy has taken its deepest plunge in a year, experts say.

People are less likely to buy big-ticket items and are more concerned for their finances than this time last year.

All five measures in data firm GfK’s long-running Consumer Confidence Index were down in January. Joe Staton, of GfK, said: “The UK’s financial pulse weakened further.”

He said it was “unlikely” the mood would brighten as the pandemic subsides “because it’s the cost-of-living squeeze that’s worrying us now”.

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