A £200 cut to energy bills could be on the cards for certain homes in the UK if the government goes ahead with a move it is reportedly preparing.

According to the Telegraph, Prime Minister Andy Burnham is investigating how subsidies can be targeted to households living in fuel poverty.

It comes as the war in Iran continues to push up global energy prices – with no signs of an end on the horizon.

At the beginning of next month, the price cap for the average UK household will rise by 4% to £1,723 per year.

And energy company EDF is predicting that when the cap is next increased at the start of 2027, it will rise above £2,000 for the first time since 2023.

The Telegraph reported that ‘industry insiders’ say a support scheme named the Energy Price Protection Payment (EPPP) is ‘ready’ to be implemented when that next rise happens in January.

It could either be announced at Chancellor John Healey’s first Budget on October 28 or when the next price cap change is confirmed in November, the newspaper said.

The payment would reportedly apply to households that receive the warm homes discount and others who are deemed in need of support.

But the paper said it is unclear whether or how it would cover the millions of others who are also classed as being in fuel poverty, and a final decision on the move is yet to be made.

A government spokesman said: ‘The Chancellor is fully focused on giving families and businesses breathing space and helping ease cost pressures.’

Last year, the government cut £150 from bills after Rachel Reeves removed green levies from them at her last Budget.

Burnham pledged to go further on tackling the cost of living after entering Downing Street this summer, and in his first week as PM he announced VAT would be removed from bills from October.

Around six million homes around the UK receive a £150 Warm Home Discount in the winter.

Households qualify if they receive housing benefit, income-related Employment and Support Allowance, Pension Credit and universal credit, and the discount is applied automatically.

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