UK considering targeted support for households as energy costs soar

LONDON- The British government is looking to provide "targeted" support for poorer households to offset the impact of surging energy costs due to the conflict in the Middle East, finance minister Rachel Reeves said in an interview published on Saturday.

Reeves told the Times newspaper the government was looking at options to help those vulnerable to sharp rises in energy prices, especially those who relied on heating oil, but ruled out universal help for all households, saying it would be unaffordable.

The Labour government, trailing in the polls to the populist Reform UK party, has come under pressure from opponents to cap regulated household energy tariffs - due for review in late May - and to scrap a planned rise in vehicle fuel duty in September.

"I have found the money and we’ve worked through with MPs (lawmakers) and others a response for people who are not protected by the energy price cap. We’re giving greater support to those who really need it," she said of the plan to help households who rely on heating oil.

More than a million households in Britain use oil for heating, particularly in rural areas where connection to the gas grid is not available. The highest concentration is in Northern Ireland, where almost half of households rely solely on the fuel.

HEATING OIL USERS FACE GREATER PRICE SHOCKS

Heating oil is not covered by the government's energy price caps, leaving those consumers more exposed to global swings in oil prices. Reeves told the Times the Treasury was modelling different scenarios depending on how long the Iran conflict lasted, including "more targeted options" of support.

"I am concerned given how high our debt is, the debt that we inherited, and so I want to look at what the different options available would be," she said.

Britain's Competition and Markets Authority, wrote to Reeves on Saturday saying it was contacting a number of firms involved in the supply of heating oil "as a matter of urgency" to assess whether their practices raised any concerns.

"The CMA is at the initial stage of its review, and while it should not be assumed that any businesses have broken consumer protection law, we will not hesitate to take enforcement action if potential breaches are identified," the letter from the CMA's chief executive Sarah Cardell said.

The CMA said it was also monitoring vehicle fuel prices to identify if the current situation was being exploited.

The Times said Reeves would use a speech on Tuesday not just to address energy issues, but also to call for a closer alignment with the European Union single market to boost growth.

"Brexit has not been good for our country, for growth, for prices in the shop," she told the paper.

"It’s almost 10 years since we voted Leave. That ship has sailed but there’s an awful lot we can do to improve our trading relations. Where that requires alignment in our national interest, we should absolutely align."

-Reporting by Michael Holden; Editing by Toby Chopra and Louise Heavens/Reuters