Cost of living payment crisis: Energy bill costs ‘set to rise by £110bn’ over next year

In other news, BBC broadcaster Laura Kuenssberg has said Boris Johnson’s own “personality and behaviour” led to his eventual downfall as prime minister.

Iain Conn, the former chief executive of Centrica, said he supported Scottish Power’s £100bn plan for a deficit fund allowing the energy companies to freeze prices – an idea backed by trade body Energy

UK.Conn said “something has to be done and done quickly” with the UK “facing a national crisis”.

He told BBC Radio 4’s Today programme: “The magnitude and pace of price rises are simply impossible for customers, whether they are individuals or businesses, to plan for, manage and afford.”

The government would need to spend more than £110bn to cover almost all of Britons’ extra energy costs over the next year, a new report by Institute for Government (IfG) has found.

It would cost £23bn to cover October’s energy price cap hike, according to the think tank – with the average household set to spend £900 more on energy this autumn than was expected only three months ago.

Extending support to ease the pain of soaring bills next year would cost another £90bn, the IfG said, raising the prospect of “substantial” spending during the cost of living crisis.

In others news, Liz Truss has signalled that she will not appoint an ethics adviser if she replaces Boris Johnson, suggesting it was unnecessary because she knew “the difference between right and wrong”.

Re-establishing relations with Russia would be “catastrophic” and make the cost of living crisis “100 times worse”, Britain’s armed forces minister has said.

Political correspondent Adam Forrest reports:

Rishi Sunak has compared his approach to the economy to Margaret Thatcher.

The Tory leadership hopeful said that like the former PM, “I don’t want to make promises that I can’t keep.”

Mr Sunak told BBC Radio 4’s Today he was “very privileged and humbled” that supporters of her economic policies were backing him, as he attacked Liz Truss’ “unfunded” tax cuts.

He declined to be drawn on whether he would revolt and vote against Truss’ tax cutting emergency budget if she became prime minister and he was a backbench MP.

He said he is “not going to engage in these things” while the race is still under way.

“Right now, we should be talking about the major challenges that our country faces – creeping inflation, getting support to people who need it.”

Asked if he thought the Tory leadership contest had been too long, Mr Sunak said: “I don’t have a choice … When it’s over I’m sure we can look back and reflect.”

The Trade Unions Congress boss has said there has been “scaremongering” over the impact of the minimum wage on business ever since it was introduced, when asked whether businesses would struggle with an increase to £15-an-hour.

A new Institute for Government report has set out the urgent choices facing the next prime minister in the cost of living crisis.

It said they may need to announce tens of billions of pounds more in support for households this winter.

The report sayid options to ease pressures included:

• Extending current support package
• Using targeted support
• Capping energy bills

Labour revealed plans at the weekend for the minimum wage to factor in the cost of living – which could see low-paid workers earning hundreds of pounds more a year.

James Heappey has said he does not believe a universial freezing of energy bills is the way to go to support people during the cost of living crisis in winter.

He said “more targeted” packages are “probably the better solution” to get money to those who needs it most: