To tackle the cost-of-living squeeze, which could see households losing £1,200 a year, the Government have discussed the idea of offering targeted financial support for fuel bills, like that of the Warm Homes Discount.

The Warm Homes Discount scheme currently offers those receiving benefits to apply for a one-off £140 payment.

Not only is there the opportunity for this payment to be increased, but there may also be a wider expansion of who can apply. According to Government sources, this was “under discussion with other options.”

Commercial and domestic price hikes

This news comes following the warning of customers facing potential higher shopping fees due to companies passing on the costs of soaring energy prices.

Three out of five businesses expect their prices to increase in the next three months, according to a British Chambers of Commerce survey of almost 5,500 respondents.

Domestic gas and electricity bills could also rise as much as 50 per cent in April as the energy price cap is hiked. This, in turn, could place pressure on the Government to introduce support as soon as possible.

Despite this, some industry sources say that narrow targeting may be lacking due to an increase in bills impacting many households.

The effects on green policies

Following COP26, it has been argued that deferring the additional levies on bills supporting green policies would be problematic, seeing as these levies are intended to reduce the use of hazardous fossil fuels.

The act of shifting these green levies from energy bills to general taxation is being backed by some, as it would mean those with higher wages pay more than those spending more of their income on necessities such as heating.

Experts also claim it would save the Government money on borrowing costs by reducing the measure of inflation. However, the Treasury is hesitant to raise the general tax burden by £12 billion in National Insurance contributions starting in April, at the same time as the introduction of the increased energy cap.

Protecting additional suppliers

An alternative route would be to finance the energy companies by launching a facility allowing them to use Government funds when general costs elevate, then re-paying these when prices lower again.

This would iron out price spikes and would have the added benefit, energy providers argue, of avoiding further providers going bust.

Although nothing has been officially confirmed yet, it has been reported that the Government is set to announce the new measures within the next month.

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