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Ed Miliband has hinted that the Government could cut the rate of VAT on energy bills. The Energy Secretary said on Sunday he would not speculate ahead of Chancellor Rachel Reeves's Budget in November.

When asked if the Government would consider scrapping the 5% rate, he said the country was facing a "cost-of-living crisis that we need to address as a government" and "we're looking at all of these issues". Scrapping VAT on domestic energy bills would save the average household £86 a year and cost an estimated £2.5billion a year to implement, according to the charity Nesta. The Government is under pressure to reduce household energy costs and, before the election, Labour pledged to lower average bills by £300 a year by 2030.

Mr Miliband told the BBC's Sunday with Laura Kuenssberg programme he stood by that promise, but the reason bills were so high was "because of our dependence on fossil fuels".

He added: "There is only one route to get bills down, which is to go for clean power, home-grown, clean energy, that we control, so we're not at the behest of the petrol states and the dictators."

His comments will fuel speculation that Ms Reeves is planning a select number of giveaways to soften the impact of tax rises elsewhere.

It comes as the Chancellor looks to plug a fiscal hole estimated at up to £30billion.

The Treasury said: "We do not comment on speculation."