Chancellor Rishi Sunak should adopt a programme of 'helicopter money' to support millions of low- and middle-income households through the escalating cost of living crisis, according to the Social Market Foundation (SMF). In a blog published on Wednesday, the thinktank proposed sending one-off cash payments worth £8.5bn to households struggling with energy bills.
The SMF's chief economist, Dr Aveek Bhattacharya, urged Sunak to reject more complex proposals from the energy industry, which he said would encourage higher energy use and prop up failing suppliers. Instead, he recommended a £300 cheque for households without a higher-rate taxpayer, plus an additional £200 for those on universal credit or legacy benefits, including pensioners and disabled people on basic support.
Bhattacharya described the payments as 'Rishi's cola (cost of living assistance)' and said they could be delivered as a clear one-off intervention, avoiding the political difficulty of ending ongoing subsidies. The proposal comes two weeks before Ofgem announces a likely £500 rise in the annual energy price cap from April, pushing inflation towards 6%.
The Treasury responded that such a scheme would cost roughly the same as the government's three-year investment to tackle elective backlogs in the NHS. A spokesperson emphasised existing support, including a £2.2bn cut to the universal credit taper and a £1,000 annual increase in the national minimum wage, as well as frozen alcohol and fuel duties and targeted energy bill help.
The SMF's call follows similar demands from the Joseph Rowntree Foundation for an immediate emergency payment for the lowest incomes. Sunak is reportedly considering a deal with energy companies to cap price rises, which could require a £20bn loan to maintain bills near current levels.
