Chancellor piles pressure on Liz Truss with call for energy bills help for £45,000 earners

Tory leadership frontrunner has criticised ‘handouts’ – but Nadhim Zahawi admits next PM will need to do much more

People earning £45,000 will need government help with their rocketing energy bills, the chancellor says, piling pressure on Liz Truss to beef up her plans.

The Tory leadership frontrunner has criticised “handouts” to ease the pain of the winter increases and is thought to favour extra support for the lowest paid only.

But Nadhim Zahawi admitted the crisis – with average annual bills set to be £3,549 from October and predicted to top £5,300 from January – means the next prime minister will need to do much more.

The chancellor, a Truss supporter, said: “My concern is there are those who aren’t on benefits.

“If you are a senior nurse or a senior teacher on £45,000 a year, you’re having your energy bills go up by 80 per cent and will probably rise even higher in the new year – it’s really hard.

“If you’re a pensioner, it’s really hard. So Universal Credit is a really effective way of targeting, but I’m looking at what else we can do to make sure we help those who really need the help. We’re looking at all the options.”

Both Ms Truss and Rishi Sunak have refused to set out detailed policies to reduce winter energy bills, despite the 80 per cent hike in the price cap from October being predicted for many months.

The foreign secretary has made £30bn-plus of tax cuts her flagship policy, despite experts pointing out they will overwhelmingly benefit the very wealthy.

Mr Zahawi – who is a supporter of Ms Truss, but is unlikely to be her chancellor – has drawn up a menu of options for the next prime minister who takes office on 6 September.

Every household will receive a £400 rebate on their energy bills to be paid in instalments from October, but that was announced before Friday’s 80 per cent hike in the cap.

They include only increasing benefits, a loan scheme for suppliers and even Labour’s plans to freeze energy bills, part funded by a bigger windfall tax on energy suppliers.

Both Ms Truss and Mr Sunak have rejected that approach, but Mr Zahawi told The Daily Telegraph: “Nothing is off the table.

“We are in a national economic emergency. This could go on for 18 months, two years, if Putin continues to use energy as a weapon.”

But George Eustice, the environment secretary, defended the delay in any announcement, saying: “Both candidates have said they will do more. You don’t have long to wait, there will be a new prime minister in place in 10 days or so.

“And that is the point at which that new prime minister should look at the options and make decisions. and they’ve both made clear that this will be absolutely at the top of their in-tray.”