'Bailout for benefits street': Tories accuse Labour of abandoning working families over Iran war energy bill help

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Tory leader Kemi Badenoch attacked the Prime Minister today over recently announced plans to provide financial support to “those that need it most” over rising bills caused by the US and Israel’s war on Iran.

It comes after Chancellor Rachel Reeves told the Commons she would not announce an “unfunded, untargeted package of support” like the one produced by Liz Truss when Russia launched its invasion of Ukraine in 2022.

Attacking the PM over plans to exclude middle-class households, Mrs Badenoch said: “He says bills are coming down, they are higher than when he came into office. Families and businesses will suffer from the spike in energy costs because of his decisions.

Read more: Iran ‘targets US military bases’ in new wave of attacks

“He could abolish the green taxes on their bills, he could stop the fuel duty rise, we could drill our own gas in the North Sea. What’s he doing? He is planning another giveaway to people on welfare. Yet again, he’s taking money from those who do work to give to those who don’t.

“First we had the Budget for Benefits Street, now it’s a bailout for Benefits Street. Doesn’t this just prove that they’ve given up being the Labour Party and they’re now just the welfare party?”

Hitting back, Sir Keir said: “They’re the ones that doubled spend on welfare, they’re the ones with a broken system and when we tried to mend it, what did they do, they voted against it... She talks about the spike in energy prices, that’s because of the war which I say we shouldn’t join and she says we should join without following through on the consequences.”

Mrs Badenoch also accused the PM of allowing Energy Secretary Ed Miliband to decide whether the UK should drill for North Sea Oil.

Sir Keir pointed out that it is, in fact, Mr Miliband’s job to make that decision.

He said: “Under statute, that is a matter for the Secretary of State, as she knows, because it’s the same arrangements as were in place under the last government.”

He later told the Commons: “We need to take control of our energy prices.

“The only way to do that is through renewables. The party opposite used to make that argument.

“One of their one of their senior figures in ’22 said this, ‘it’s investment in nuclear and renewables that will reduce our dependence on fossil fuels and keep our consumer costs down’.

“Who was that senior figure? The leader of the Opposition (Mrs Badenoch).”

This debate comes after Labour promised to protect “those who need it most” from rising energy bills caused by the war in the Middle East.

Ms Reeves said the economic challenges from the Iran war may be “significant” and contingency planning is underway for energy bill support “for those who need it most”.

The crisis in the Middle East has pushed up oil and gas prices, hitting motorists as they fill up at the pumps and potentially pushing up domestic energy bills later this year.

Typical household energy costs will fall on 1 April when the new energy price cap takes effect, but could rise sharply this summer due to a jump in oil prices since the start of the war.

Speaking to the House of Commons, Ms Reeves 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.

She continued: “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 ironclad fiscal rules to keep inflation and interest rates as low as possible.”

Labour MP Meg Hillier asked the Chancellor "what she is doing to ensure the data is available to help target support to those who need it most".

Ms Reeves replied that the government is working with the Department for Work and Pensions to ensure the support is targeted at those who need it most.

Green Party leader Zack Polanski has called the Chancellor’s response to fears about the cost of living amid the Middle East conflict “unbelievably weak”.

He said: “This is an unbelievably weak response from the Chancellor to the enormous bill hikes facing households in the UK.

“Monitoring the situation? Considering new powers? Reeves’s lukewarm words show that she and her Government simply do not understand the scale of the cost-of-living crisis about to hit this country.

“We need a guarantee that energy bills will not rise past June, funded by a strengthened windfall tax and higher taxes on extreme wealth.

“And the Government should follow the example set by Spain in taking immediate action to reduce the burden on households by freezing rents.”

The Liberal Democrats have urged the Chancellor to remove VAT on heating oil and liquefied petroleum gas (LPG).

In the Commons, the party’s Treasury spokeswoman Daisy Cooper said: “Families are fearful, will the Chancellor consider zero-rating VAT on heating oil and LPG (liquefied petroleum gas)?

“Will she consider introducing a price cap mechanism for off-grid fuels? Will she commit to halving energy bills over the next decade by reforming pricing structures?

“And if bills rise to more than £400 a year, as some are warning, will the Chancellor commit to coming back to this House and outlining a broader support package so that all struggling households, or many struggling households, don’t face a crippling hit of that scale?”

Ms Reeves replied: “When they were in government, they increased VAT on everything, so it’s a bit rich to say that they want to cut it now.”

“There seems to be a sort of slight contradiction in what (Ms Cooper) is saying between whether she wants targeted support or blanket support.

“And I would argue that the progressive, universal approach that we’re taking is the right one – £150 off everyone’s energy bills, but then targeted support for those who need it most,” she added.