Boris Johnson’s government is set to announce new measures to help increase energy bills within the next month.
Ministers across the government have now concluded that “something needs to be done” on the energy bill ahead of an increase on April 1, although they have not yet decided what form this assistance will take.
This means that the Ministry of Finance has effectively accepted that additional funds will be needed, although they remain reluctant to defer large amounts of cash on an ongoing basis following massive spending during the pandemic.
The Prime Minister will personally attend meetings on the energy crisis next week, Sky News has been told.
More: Tory MPs urge Prime Minister to scrap energy taxes as bills rise
27 different energy companies have failed in just over four months
An announcement of the final decision is expected no later than February 7, the date when the energy watchdog Ofgem will announce the extent of the increase in the price ceiling, which will be in place from April to September.
This is expected to be an increase of around £ 600 per year, from £ 1,277 to annual bills of over £ 1,877.
It will signal an increase in the energy bill for at least 15 million households, which will then come into force almost two months later.
“It would be ideal if we could announce something before February 7,” a government source said.
“Ministers are very aware of the issue from April 1.”
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Is there a solution to sky-high energy bills?
The minister is struggling with various options that are likely to target the less well-off.
Johnson has already stated that he is not in favor of financial assistance to those who are considered to be able to afford a large price increase, suggesting that a reduction in VAT on energy is off the table.
“No opportunities here are perfect,” a government source told Sky News.
The biggest fear in the government is that they cannot provide one-off assistance to the least well-off without facing demands for more assistance until energy prices fall, which can take months or years.
Tensions with Russia, which supplies much of Britain’s gas, the lack of gas storage facilities and the structure of the energy market have all been blamed for contributing to the problem, with the only real long-term solution being to move away from gas-fired power plants.
Sky News understands that many of the discussions with suppliers are about the future regulation of the energy market, after 27 different companies in a little over four months have not been able to create a more resilient market.
“The future of energy regulation dominates our discussions with industry,” a government source said.
However, the Treasury is likely to require robust assurances that prices will fall soon, to ensure they do not face demands for more assistance later this year.
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