Rishi Sunak urged to increase benefits to help people pay their energy bills

Sir Iain Duncan Smith, the former Tory leader, said delaying the next increase until June would ‘provide an inflationary shield to those who are struggling the most’.

Senior Tories including Stephen Crabb, former work and pensions secretary, and MP Sir Bernard Jenkin have also called on Mr Sunak to increase benefit payments.

A government spokesman said ministers were providing £22billion in cost-of-living aid, adding: ‘We recognize the pressures on the cost of living and are doing what we can to help.

It comes after a Cabinet minister warned energy companies were breaching their licenses by threatening to switch poorer families to prepayment meters.

Therese Coffey, the work and pensions secretary, has urged Ofgem to investigate companies for cutting off customers who paid their bills directly from Universal Credit.

Last month, the government suspended the Fuel Direct Scheme to prevent energy companies from automatically raising costs for poorer households. The program helps around 100,000 people who are in debt and cannot afford to pay their bills.

Ms Coffey said several energy companies had opposed the move and two were telling customers they would no longer offer Fuel Direct payments.

In a letter to Jonathan Brearley, the watchdog’s chief executive, she said the stance was “unacceptable” and had “generated real concern”.

Some claimants have been “advised that ongoing consumption payments are no longer available and the only option for them was a prepaid meter”, she wrote.

The companies’ actions appeared to be “a direct breach” of obligations “that require suppliers to support customers in payment difficulty”, Ms Coffey added.

Ofgem has the power to impose multi-million pound fines for license breaches.