MP says Chancellor's 'half-baked' plan falls short of addressing the support needed during cost of living crisis.
The Chief Executive of Ofgem has warned the UK’s energy price cap is expected to rise in October to around £2,800 – up from £1,971.
It is estimated that some 12 million households in the UK could be facing fuel poverty over the course of the year.
The Treasury recently announced measures aimed at tackling energy price cap rises.
A new tax will be introduced on the profits of oil and gas companies operating in the UK and the UK Continental Shell.
This will help pay for a £15bn package of support which will see the most vulnerable eight million households get up to £1,200 of one-off support this year to help with the cost of living, with all domestic electricity customers receiving at least £400.
Economists and poverty campaigners have criticised the Chancellor for offering no plan for growth and failing to address the causes of poverty, while Ms Callaghan described the plan as “half-baked”.
Ms Callaghan said: “Despite the grim warnings from Ofgem and others in the industry, the UK Government has been content to sit on its hands – with more focus being given to save their law-breaking Prime Minister.
"It’s no secret the Prime Minister and Chancellor have cobbled together this half-baked plan in an attempt to distract from the scandals dominating Downing Street.
“While some of the measures announced are welcome, such as the Chancellor heeding the SNP’s calls to turn his energy loan into a grant and the windfall tax on energy companies’ profits, it is clear this announcement still falls desperately short of what is needed at this critical time.
“The Chancellor is sitting on an estimated £30bn of fiscal headroom but has only chosen to spend around £15bn while people are sitting in cold houses and turning to food banks.
"At the very minimum, the UK Government must commit to scrapping the National Insurance tax hike, reversing the £1040 cut to Universal Credit, intro ducing a Real Living Wage, a temporary suspension of VAT on household energy bills, and follow the Scottish Government’s six per cent uprating of benefits.”