Simon Clarke (Photo: Getty)
Under pressure ministers have revealed they are working on a new cost of living package amid claims they have gone “missing in action”.
Simon Clarke, chief secretary to the Treasury, said the government was “working up” a plan to put to the next prime minister.
The government is under fierce pressure to act after the Bank of England predicted a recession, soaring inflation and experts forecast the energy price cap will rocket to £4,266 a year in January.
Tory leadership favourite Liz Truss has rejected calls by opposition parties and money saving expert Martin Lewis to work with her rival, Rishi Sunak, to agree an emergency package with Boris Johnson before his successor is announced on September 5.
Clarke, who is backing Truss, said the leadership hopefuls should steer clear of announcing “new un-costed policies” during the election period.
He said: “Of course, the government is working up a package of cost of living support that the next prime minister can consider when they take office.
“It is absolutely right to consider these options in the round when the new prime minister has taken office - rather than announce new un-costed policies, without sight of all the details of the pressures people could face, during a leadership election.”
Truss has said the idea that she should sit down with Sunak and Johnson to agree emergency support is “bizarre” and a “kangaroo committee”.
However, Sunak said he would welcome a meeting to agree emergency support ahead of the winter.
Asked why she could not team up with her rival, as well as the outgoing PM, Truss said “we have a prime minister, we have a chancellor”, and they could make decisions at present.
Earlier this week Downing Street said Boris Johnson would not intervene in the cost of living crisis.
The prime minister’s official spokesman said it was up to his successor to make policy and he would not make “major fiscal interventions”.
Amid the ongoing battle for No.10, Truss was forced to deny she had ruled out direct cash payments to help people struggling.
The foreign secretary has been under pressure since telling the Financial Times her focus was on lowering taxes “not giving out handouts”.
Speaking at a campaign event in Manchester, Truss said her “priority” was keeping taxes low while also “growing the economy and avoiding a recession” but that she had not said cash payments were off the table.
Theresa Villiers, who is backing Sunak, said “no government can insulate everyone” from the rising cost of energy, but that Sunak “certainly recognises that we need to do more”.
She told Sky News: “Rishi’s determined, if he’s PM, to do as much as he can to help people through what is a crisis around the world with energy bills.”
She added that “Rishi has the right plan for the economy” at a time when the country is “heading into a really serious situation”.
With concerns mounting over the cost of living crisis, questions have been raised over any immediate cross-government action to tackle energy price hikes.
Tony Danker, director general of the Confederation of British Industry (CBI), has said that the PM and the two contenders to replace him should “come together to agree a common pledge to support people and help quell fears”.
This article originally appeared on HuffPost UK and has been updated.