The Chancellor said he would rather target support for families struggling with the cost of living.
Nadhim Zahawi has denounced Labour’s plan to freeze fuel bills as it would reward “people like me who are at the wealthier end of the spectrum”.
The Chancellor defended the Government’s support for under-pressure households as new figures showed they suffered a worse-than-expected hit in July as food prices pushed inflation to a 40-year high.
Mr Zahawi disputed Labour leader Sir Keir Starmer’s argument that scrapping planned increases in the energy price cap would keep down inflation and interest on government debt payments.
Speaking during a visit to a holiday club for children at Sydenham School in south-east London, the Chancellor told reporters: “They talk about paying for some of it because inflation would come down.
“What we see today, actually inflation plays through on food costs, and so their numbers are out on this and they need to work out and be honest with the nation how they’re going to pay for this.
“The other problem with it is, actually, you’re rewarding people like me who are the wealthier end of the spectrum and people who might have very high energy uses and be wealthy.
“Is that the right thing to do when money’s tight, when we should be targeting it to deliver that help and be resilient against Putin? Is that really the right thing to do, to waste money on wealthier households that have high consumption?
“I don’t think that’s right, with respect to Keir Starmer.”
Mr Zahawi, who helped found polling company YouGov, is believed to be one of the richest politicians in the House of Commons.
The Chancellor said that if Labour’s plan to freeze the energy price cap at its current level of £1,971 for six months from October were to be extended, it could amount to “£90 billion of spend when we’ve already obviously spent £408 billion on the Covid response and we’re spending £37 billion now.
“I would much rather see targeted support for those families.”
It was put to Mr Zahawi that Tory leadership frontrunner Liz Truss, who he is backing, is proposing untargeted tax cuts that would benefit wealthier households.
He replied that Ms Truss would impose a moratorium on green energy levies and reverse the national insurance increase.
He added: “But what she has also said is she won’t be writing a budget on the leadership campaign, she will do it once she walks into Number 10.
“My task, my responsibility, is to give her the options to be able to make that decision of how she targets the help for those families that we know are going to need it as we get through winter.”
The Chancellor also denied that the Government is waiting to provide families with additional support amid the energy crisis.
Asked why the country has to wait until January for support, while Labour has set out its plan for the autumn, he said: “We’re not waiting. We’ve got £37 billion and we’re part of the way through that, so £400 in the next couple of months off people’s energy bills for everybody.
“The eight million people who need the most urgent help are getting at least £1,200 of additional direct payments to them.”