'It’s help, not handouts': Chancellor says Treasury is working on extra cash payments for households

Boris Johnson said there could be help for people trying to cope with high energy bills and the spiralling cost of living - but he gave no details, Joel Hill reports

Inflation is rampant and with energy bills set to surge by at least 75% in October many families are facing hardship this winter.

This is a crisis but the government has been accused of behaving as if it’s not.

This morning, the chancellor, Nadhim Zahawi, confirmed that more help is on the way for those who are struggling.

The Treasury is working of another financial support package for ”later on in the winter, in December and January,” Zahawi said.

He confirmed that additional cash payments to households - the type of “handout” Liz Truss told the FT she doesn’t like - are one of the options being worked on. “Help” is what I call it,” Zahawi insisted. “It’s not handouts.”

Zahawi is backing Liz Truss’s leadership campaign but he spent this morning trumpeting the £37 billion of existing support measures which were drawn-up by Rishi Sunak when he was chancellor, as proof that the government gets how serious this is.

“In the next couple of months, eight million of the most vulnerable households will get £324,” Zahawi pointed out, “then there’s £400 for every household”.

Both of these direct cash payments are essentially “handouts” of the sort Truss considers un-Conservative.

Zahawi clearly believes they were the right thing to do in May. Perhaps wisely, he wouldn’t say if he thinks they are the right thing to do now.

Households and businesses are being forced to tighten their belts in the face of high and rising inflation. The economy contracted 0.6% in June.

With energy bills rising, ITV News Business and Economics Editor Joel Hills asks Chancellor Nadhim Zahawi what the government is doing to ease peoples' worries.

The underlying performance is demonstrably weak but the headline figure was distorted by bank holidays (unusually, there were two in June) and the winding back of the government’s vaccination and test and tracing programmes.

The real squeeze comes in October, when the energy price cap rises to at least £3,500 a year - £700 higher than was expected in May when the last package of support was announced.

People are understandably very worried right now and, given that we know the scale of what’s to come, it’s not entirely clear why the government feels is cannot set out more concrete plans.

The view appears to remain that the situation, while bad, isn’t so urgent that it can’t wait until after the leadership contest has concluded.

Although, as it stands the two candidates propose very different responses.

Liz Truss has said cutting taxes is the best way to help with living costs over winter. Credit: PA

Central to Liz Truss’s plan is an unfunded cut national insurance which will do nothing for the poor, nothing for pensioners, and will help the rich.

Some feel that putting money disproportionately into the pockets of the better off is a very odd thing to do in a cost of living crisis but Nadhim Zahawi is standing by his woman. He’s all-in.

“Liz Truss absolutely understands the problem which is why she has said won’t write a budget on the leadership campaign,” Zahawi said, adding that she will make sure there will “targeted help” for “those families which need the most help.”

If this is indeed Truss’s aim then 1) she isn’t saying so and 2) cash transfers (handouts) of some form look inevitable.

Of course, the chancellor inadvertently added to the perception that the government isn’t on top of the cost of living crisis last week.

On Thursday, when the Bank of England announced the biggest interest rise in 27 years and forecast the UK would enter recession, it emerged that Nadhim Zahawi was on holiday.

“That same day I had a meeting with the Governor of the Bank of England,” Zahawi insisted. “If you work remotely, there’s no such things as being away”.

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