I am told that a £ 10bn aid package could be announced on Thursday with fuel bills and the cost of living targeting lower-income people.
No final decisions have been made, but the Prime Minister wants to re-establish his administration before the parliamentary recess of the Queen’s Jubilee and after the publication tomorrow of Sue Gray’s report to the Downing Street parties, which is expected which would damage the reputation of the Prime Minister.
The expected acceleration of new Treasury support for the poorest follows today’s announcement by energy regulator Ofgem that energy bills are likely to rise by more than £ 800 in the fall to around £ 2,800 per household on average.
This increase would mean that in England alone, just under 10 million households would suffer from “fuel stress”: they would spend 10% or more of all their net energy income, according to a new resolution from the Resolution Foundation.
That would account for almost twice as many of those struggling to heat their homes, or 40% of all English households.
If the Treasury makes a single payment of £ 1,000 to the 10 million poorest households, either through the benefit system or through the discount on warm homes, that would cost around £ 10 billion.
Alternatively, the Treasury could advance part of next year’s profit increase, again at a cost of £ 10bn, although I understand the Chancellor is less interested in providing support through this kind of softening of the increases in inflation-linked benefits.
Part of the £ 10bn cost could come from an extraordinary tax on surplus profits for oil and gas producers.
I understand that the Treasury has ruled out extending the extraordinary profit tax to surplus profits from those that generate electricity from wind farms or nuclear power plants.