Cost of living: Chancellor Nadhim Zahawi visits US for talks

The UK Chancellor Nadhim Zahawi has arrived in the United States for talks on how to tackle the spiralling cost of living.

During what could be his final week in the job, Mr Zahawi is meeting US banks and officials to seek “international solutions” to soaring costs.

Labour has criticised the trip, saying he should be focusing on the UK.

The two candidates for prime minister have signalled they will offer more help if elected on 5 September.

The government has been accused of not doing enough to help people cope with the crisis, amid warnings that people are facing a dire winter with rocketing energy bills. Many people are having to make tough choices such as skipping meals, while others are dreading the colder months.

Both Liz Truss and Rishi Sunak, one of whom will be announced as the next prime minister, have pledged further support, though neither has given details.

James Murray, Labour’s shadow financial secretary to the Treasury, accused Mr Zahawi of being part of a “do-nothing Tory government” – adding that the chancellor was “jetting off to an international chinwag”.

“Rather than going on another junket at the taxpayers’ expense, the chancellor should start listening to people here at home and implementing Labour’s fully funded plan to freeze energy bills,” he said.

Trade union leader Frances O’Grady expressed surprised that Mr Zahawi had travelled to the US. She told the Today programme that trade unions had asked to meet him, adding: “I would’ve thought it was a priority to meet representatives of working people… who are just looking to keep their wages at least up with inflation.”

Mr Zahawi has insisted he has been working tirelessly to come up with proposals for either leadership candidate to bring in more cost-of-living support.

The chancellor – who could be replaced when the new Tory leader comes to power – is meeting banking chiefs in New York to discuss co-operating on financial services, before heading to Washington DC to discuss support for Ukraine, the global economic outlook and energy security at the US central bank.

In a video released on Twitter, Mr Zahawi said he would be talking about “Putin’s use of energy as a tool, a weapon to get back at us for the help we are putting in Ukraine and how we can coordinate further to deal with the challenge of remaining resilient in the face of that particular challenge”.

Ms Truss’s campaign team says she will not finalise her plans for crucial cost-of-living support before receiving the “full support and advice” only available to the government of the day.

A campaign source told PA: “Liz and her team are working to ensure that they are able to hit the ground running if she is elected prime minister.”

The foreign secretary’s team said she is leaning towards targeted support over help for all, but maintained she is not “ruling anything out”, while it was also reported she is considering slashing VAT by 5% across the board.

A source close to her also told the BBC this week that she would prioritise tax cuts over giving direct payments to every household. Mr Sunak has said the government “must provide some direct support” to all.

Ms Truss – who polls suggest is the favourite in the leadership race – has so far promised to help households by reversing April’s National Insurance rise and temporarily cutting energy levies on fuel bills. Mr Sunak has proposed spending billions of pounds on further payments to pensioners and the low-paid over winter, arguing tax cuts would not help them enough – but has not set out details. He also wants to cut VAT on fuel bills.

Experts and charities have warned lives will be at risk this winter after the energy regulator hiked the price cap on household bills by 80%.

A typical household gas and electricity bill will rise to £3,549 a year from October, Ofgem announced on Friday.

The increase in consumers’ bills follows sharp rises in wholesale gas largely due to the conflict in Ukraine, which has reduced supplies of Russian gas.

The government has already said all households will get a £400 rebate on energy bills. It means about £60 will be knocked off energy bills every month for six months. Low income and vulnerable households will receive an additional £650.

However, energy prices have soared since that package of measures was revealed, and from October a typical household will see monthly energy bills of nearly £300 a month.

Meanwhile Boris Johnson, in his last week in office, will be in Dorset on Tuesday to see preparations for a government-funded scheme to give 7,000 rural homes superfast broadband.

It comes as work kicks off on the first major contract under the government’s £5bn Project Gigabit – the biggest broadband rollout in British history.

It is expected Johnson will also visit other parts of the country this week, in what has been described as a “farewell tour”.