Rachel Reeves has criticised Liz Truss over her approach to energy bill support, signalling that the richest households will not receive taxpayer-funded help if prices surge due to the ongoing Iran conflict.
The chancellor indicated that any future government assistance would be focused on lower-income households, should rising oil and gas prices lead to increased energy costs. Her comments mark a clear shift from the previous policy introduced under Truss.
During her brief 49-day tenure as prime minister, Truss introduced a nationwide energy price cap of £2,500 per year. The measure followed a sharp rise in gas prices triggered by Russia’s invasion of Ukraine in 2022.
Targeted Energy Support Strategy Amid Rising Oil Prices
That intervention came with an estimated cost of up to £150 billion, funded through taxation and additional government borrowing. The policy applied universally, benefiting households across all income levels.
Truss later resigned after her government’s tax-cutting mini-Budget sparked market turmoil and economic instability.
Speaking in the Commons on Tuesday, Reeves warned that the economic consequences of the Iran conflict could be “significant”. However, she stressed that any government response would prioritise those most in need.
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She said: “The previous government pushed up borrowing, interest rates, inflation and mortgage costs with an unfunded, untargeted package of support under Liz Truss. That gave the support to the most wealthiest of households.
“That left us with high levels of national debt, a cheque written then for a bill that is still being paid today.
“I can confirm to the House that contingency planning is taking place for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our iron-clad fiscal rules to keep inflation and interest rates as low as possible.”
Iran Conflict Sparks Oil Price Surge And UK Economic Concerns
Global energy markets have been unsettled following Donald Trump’s decision to join Israel in launching strikes on Iran, contributing to a rise in oil prices and fuelling concerns over higher household bills.
Addressing MPs, Reeves acknowledged the broader impact of the conflict on the UK economy.
She said: “This is not a war that we started, nor is it a war that we joined… but it is a war that will have an impact on our country.
“The challenges may be significant but I promise to do what is right and fair, being responsive in a changing world and responsible in the national interest.”
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