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Resolution Foundation backs £2bn targeted plan to cut winter energy bills

The proposal would limit help to households with top earners taking home £24,000 or less and target roughly 40% of households.

Reported · Written up by our desk · Europe

The Resolution Foundation has urged the Labour government to prepare an emergency support scheme to cut winter energy bills for low-income households, saying higher wholesale gas prices make further increases likely through the season.

In a report, the thinktank recommends a program costing £2bn to the taxpayer that would reduce annual bills by up to £175 for poorer consumers. Eligibility would be restricted to households where the highest earner earns £24,000 a year or less.

The foundation says the approach would reach about 40% of households, and it argues this would be more generous than a plan limited only to households receiving means-tested benefits, though it would be harder to implement. Jonathan Marshall, principal economist and co-author, said a targeted energy discount could save eligible households £175 a year and reach more than four-fifths of the poorest families.

Marshall also suggested ministers have a plan ready to be “switched on” in January next year, when the quarterly energy cap is adjusted. He said support could be structured as a flat £175 discount or as additional help for the lowest-income households, with an alternative described as expanding beyond means-tested benefits.

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