Reeves said that, while the full impact of the crisis is not yet known, “the challenges may be significant.”
In response to the 2022 energy crisis sparked by Russia’s invasion of Ukraine, the government of then-Prime Minister Liz Truss subsidized the bill of every household in the country — a policy backed by the Labour Party at the time.
But Reeves today criticized the “unfunded, untargeted” 2022 package, saying it had pushed up borrowing, interest rates and inflation.
Between 2022 and 2024, households in the top income decile received an average £1,350 of direct energy bill support, Reeves said, contributing to national debt “still being paid today.”
However, the chancellor stopped short of explicitly ruling out a similar approach. She said: “Contingency planning is taking place for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our ironclad fiscal rules to keep inflation and interest rates as low as possible.”
The government has already announced a £53 million package of support for households that use heating oil, which are not protected by the energy price cap.
