The Resolution Foundation has urged the government to introduce an emergency scheme to cut energy bills by up to £175 this winter for low-income households, warning that wholesale gas prices are likely to rise following renewed conflict in the Middle East. The thinktank says ministers should act now to have a plan ready for when the quarterly energy price cap is adjusted in January, building on Andy Burnham's earlier move to temporarily remove VAT from electricity bills, which saved households around £45 a year.

The proposed £2bn scheme would target households where the highest earner takes home £24,000 a year or less, reaching roughly 40% of households and more than four-fifths of the poorest families, going further than support limited to those on means-tested benefits. The report notes that during the 2022 energy crisis, the £44bn government subsidy helped all households including the wealthiest, and that poorer households cut energy use by 15% more than wealthier ones, with most of that reduction not yet reversed. A Carnegie UK survey found 28% of households could not afford an £850 emergency payment, while the chancellor, John Healey, has said cost of living will be a priority ahead of the budget on 25 October.