Starmer pledges to freeze energy bills

Sir Keir Starmer has set out a “very strong, robust, costed plan” to stop energy bills rising over the winter – paid for in part by an extension of the windfall levy on the profits of the oil and gas companies.

The Labour leader said the £29 billion plan to address the “national emergency” would freeze the energy price cap at its current level of £1,971 for six months from October, saving the average household £1,000.

He contrasted Labour’s proposal with the inaction of “lame duck” Prime Minister Boris Johnson and the “internal battle” of the Tory leadership contest, increasing the pressure on contenders Liz Truss and Rishi Sunak to spell out how they would help families struggling with soaring bills.

But economists warned the plan could cost as much as the Covid furlough scheme if extended, while some on Labour’s left criticised Sir Keir’s rejection of calls for the nationalisation of energy firms in favour of handing them billions of pounds to make up for the difference between rising wholesale costs and what they charge customers.

Sir Keir told BBC Radio 5 Live yesterday: “Millions of people are already struggling with their bills, we all know that across the country and the hikes that are expected for this October... from a price cap of just under about £2,000 to £3,500 and then £4,200 and millions of people, millions of families are saying ‘I just can’t afford that’...

“We either allow oil and gas companies to go on making huge profits which is what’s happening at the moment or we do something about it.

“We, the Labour Party, have said we’ll do something about it.

“We will stop those price rises and we will extend the windfall tax on the profits that the oil and gas companies didn’t expect to make. So we’ve got a very strong, robust, costed plan here which will stop those rises this autumn.”

Sir Keir added that scrapping the planned increases in the price cap would keep inflation down, seeing it peak at about 9% rather than the 13% the Bank of England is forecasting.

He hit out at the government and the Conservative leadership hopefuls, saying they had not produced any “credible proposals” to tackle the crisis.

“We’ve got to grip it because at the moment what we’ve got is two Tory leadership candidates who are fighting each other in a sort of internal battle, where their main argument seem to be about how awful their record in government has been and a prime minister who’s a lame duck because he’s acknowledged there’s a problem with energy bills, but says ‘I’m not going to do anything about it’,” he said.

However, the Institute for Fiscal Studies (IFS) questioned Labour’s explanation as to how it would fund its support package.

The thinktank’s director Paul Johnson said the party’s plan to cancel the energy price cap rise – if extended to a year – would be “looking at the cost of furlough”.

He also told BBC Radio 4’s Today programme that it would be “true this year” that this would bring down inflation and interest on government debt payments, but warned the average rate of inflation would not change over time assuming it was only a temporary subsidy, “so that’s not a real saving... in the long run”.

In response, Sir Keir told BBC Breakfast: “What Paul Johnson isn’t disputing is that our plan will reduce inflation...

“Of course what he’s rightly saying is what happens after April matters because you have to maintain measures to reduce inflation.”

PRICE CAP: Labour leader Sir Keir Starmer has set out a £29 billion plan to help curb soaring fuel