The escalating energy crisis is a “Dunkirk moment” that requires radical action, two high-profile former ministers have warned.

Ex-Labour MP Frank Field and former pensions minister Ros Altmann condemned the failure of privatisation in a joint statement released on Saturday as they urged the next prime minister to control price rises in order to get a handle on soaring energy bills and rising inflation.

It is widely assumed that Foreign Secretary Liz Truss, whose campaign has led on the promise of tax cuts, will be handed the keys to Number 10 in a matter of days by defeating rival Rishi Sunak.

Ms Truss has indicated that she could provide some form of extra help for vulnerable households if she takes office.

In a direct message to the next prime minister, the pair jointly warned against “poorly-targeted taxpayer handouts”.

This is a Dunkirk moment when patching up simply won’t do. But a review will take many months and there’s a need to help the most vulnerable in the immediate future

The intervention by Lord Field and Baroness Altmann – two figures with a long history of campaigning inside and outside politics – is the latest warning about the need for drastic support from the Government as households face up to a long winter.

Lord Field, who served briefly as a minister in Tony Blair’s government, was the MP for Birkenhead for 40 years before entering the Lords while Baroness Altmann served as pensions minister in the David Cameron government between 2015-16.

The pair argue that direct action to reduce energy costs is preferable to handouts as it will help curb inflation.

The new prime minister “should focus help with energy costs on directly reducing inflation by controlling the price rises, rather than adding upward pressure with poorly-targeted taxpayer handouts,” Lord Field and Baroness Altmann wrote.

“The incoming government must recognise that privatisation has failed consumers who are being forced to pay for collapsed energy suppliers through higher standing charges and soaring costs.

“An urgent review and radical reform of pricing structures is called for immediately while temporarily halting the extraordinary, damaging price increases.”

In the statement, both peers also urged Boris Johnson’s replacement to “admit the failure of privatised energy markets and intervene directly to stem price rises”.

They said that a temporary halt or reduction in price rises will have the benefit of reducing the consumer price index and ease pressure on households and businesses, while also preventing “wage-price spirals spreading uncontrollably, while allowing time for market prices to subside, super-normal profits to be redistributed and better price mechanisms to be agreed”.

The peers argued: “Action to reduce price rises directly, with 6-9 months of subsidies rather than handouts of thousands of pounds to households, plus additional measures to seek contributions from super-normal profits of non-gas energy suppliers, will better target the much-needed support and allow time for a proper review.

“Doling out more taxpayer money will not help all those in need, especially people just above the means-test threshold, while boosting profits bonanzas for some energy firms and forcing small businesses into insolvency.

“If energy price rises are capped, inflation will be lowered by several percentage points, which reduces other price rises and wage rises will also be lowered.

“Given what’s been happening to energy prices it is quite clear that privatisation of supplies has failed.

“A major review on how best to own the community’s energy supplies should be set in hand by the new government.

“This is a Dunkirk moment when patching up simply won’t do. But a review will take many months and there’s a need to help the most vulnerable in the immediate future.”

The outgoing Johnson administration is also criticised for failing to choose the right policies to deal with inflation.

“It should be recognised that huge amounts have already been spent on protecting the most vulnerable which could also have been aimed at reducing inflation,” Lord Field and Baroness Altmann say.

“We mustn’t make that mistake again. It is in everybody’s interest that justice over price increases is obtained in a way which benefits the whole community by lessening the rate of inflation.

“The new government’s package needs to reflect how serious fuel price increases are for our country.”