Rachel Reeves will reportedly wait until the autumn to announce a significant package of support for households that rely on gas heating, amid fears over spiralling energy bills as a result of the Middle East crisis.
The chancellor is said to be preparing to announce a limited package of support for bills over the summer, before a bigger bailout in the autumn.
She is expected to allow the energy price cap to rise in July, despite expectations that it will jump by as much as £330, according to forecasts – meaning that average household bills will hit £1,972, forecasts from Cornwall Insight say.
Treasury officials told The Times that Ms Reeves plans to allow this to go ahead because she believes the true impact of the conflict on bills will be clearer by the autumn.
Sources said the chancellor believes that any support package should be introduced when gas consumption increases heading into the winter, but they insisted that no final decisions have been made.
An energy industry source told the Times: “The thinking is that you let the July bills rise happen and save any major intervention for the autumn.
"There are two good reasons for this; the first is that it buys you time to properly look at the data and the best way to offer support.
"The second is, it’s going into the winter when you want to announce any package, not into the summer.”
But Simon Francis of the End Fuel Poverty Coalition warned that a delay in announcing support would carry “a real risk of unintended consequences”.
He said: “The taxpayer clearly shouldn’t be subsidising wealthy households running swimming pools or hot tubs, but ruling out support from July 1 carries a real risk of unintended consequences.
“Households on direct debit typically build up credit over the summer months, which helps them manage higher bills in winter.
"But if prices rise in July, that buffer will be smaller than usual, leaving many families exposed when the cold weather arrives.”
Giving a statement in the Commons earlier this week, the chancellor rebuked the previous Conservative government for providing “blanket” support in the wake of Russia’s attack on Ukraine, which she said had cost the country tens of billions of pounds.
Instead, Ms Reeves made clear Labour ministers will offer targeted rather than universal support “to those who need it most”.
In her statement on Tuesday, the chancellor said that blanket help offered under Liz Truss “gave the support to the most wealthiest of households” and “left us with high levels of national debt, a cheque written then for a bill that is still being paid today”.
While she indicated that more targeted support would be offered, she said this support wouldn’t be unveiled for at least another month.
The Treasury has been contacted for comment.
Inflation to surge and growth to fall as Iran war risks energy shortages, OECD warns
UK faces weaker economic growth and higher inflation due to Iran war – OECD
Next warns of higher prices for shoppers as Iran war hikes costs
UK climate minister: We need to re-make the case for net zero
House of Lords back UK social media ban for under-16s for second time
Starmer promises Government will ‘go further’ after Google addiction ruling
