LONDON — The British government is considering targeted financial support for lower-income households as energy costs rise sharply in the wake of the conflict in the Middle East.
Finance Minister Rachel Reeves said the government is assessing a range of options to shield the most vulnerable from higher energy bills, particularly households that rely on heating oil. However, she ruled out broad-based support for all households, saying such a move would be too costly.
According to Reeves, the government has already identified funding and is working on measures to assist those who are not protected by the energy price cap. She said the focus would be on people most exposed to price shocks, especially heating oil users.
More than one million households in Britain depend on oil for heating, particularly in rural areas that are not connected to the gas grid. The issue is especially acute in Northern Ireland, where nearly half of all households rely entirely on heating oil.
Unlike gas and electricity consumers, heating oil users are not covered by government-regulated energy price caps, leaving them far more vulnerable to swings in global oil markets.
Reeves said the Treasury is modelling various scenarios depending on how long the Iran-related conflict continues, including more narrowly tailored forms of assistance. At the same time, she acknowledged the need for caution given Britain’s high debt burden.
Meanwhile, the Competition and Markets Authority (CMA) said it has contacted several heating oil suppliers as a matter of urgency to determine whether any market practices have raised concerns.
CMA chief executive Sarah Cardell said the review remains at an early stage, but warned that the regulator would not hesitate to take enforcement action if any breaches of consumer protection law are identified.
The CMA is also monitoring vehicle fuel prices to ensure the current situation is not being exploited.
In a related development, reports said Reeves is expected to use a speech on Tuesday not only to address energy pressures but also to call for closer trade alignment with the European Union’s single market as part of efforts to support economic growth.
She was reported as saying that Brexit had not benefited Britain in terms of growth or consumer prices, and argued that there remains significant scope to improve trading ties with the EU where doing so serves the national interest.
