Liz Truss’s plan to reverse the rise in national insurance payments will leave the UK’s poorest households just 76p a month better off on average, according to the Tony Blair Institute.
By contrast, a new report by the organisation said the wealthiest households will benefit to the tune of £93 a month from the policy.
Truss, the favourite to replace Boris Johnson as prime minister, has said she will axe the NI increase, which was introduced by her rival, Rishi Sunak, when he was chancellor to raise £12bn for the NHS and social care.
The Institute also says that Sunak’s plan to axe VAT on energy bills will have “little to no impact” for low income households.
Instead, the organisation’s analysis said those on means tested benefits should receive an extra £55 a month from the government to help them cope with rising inflation and soaring energy bills.
Ian Mulheirn, the Tony Blair Institute’s chief economist, said: “The combination of rapidly rising energy bills and the wider inflation squeeze means low income families are facing a bleak winter and a worse spring.
“Millions of households will be simply unable to pay their bills unless the government acts – both this October and when the existing support packages end in March.
“Ideas floating around in the Conservative leadership contest – including a reversal of the NICs increase or a cut to VAT on fuel – will do almost nothing to help the people who are most exposed this winter.
“A serious response will require the new prime minister to extend and expand chancellor Sunak’s support package. The cost will be in the tens of billions, but there is no alternative.”
Truss last night also ruled out imposing a windfall tax on the huge profits being enjoyed by energy firms.
She told a Tory leadership hustings that “profit is not a dirty word”.