Keir Starmer has defended Labour’s plans to stop energy bills rising over the winter as a “very strong, robust, costed plan”.
The Labour leader said the £29 billion scheme would mean the energy cap to be frozen at its current level of £1,971.
Starmer said that Labour “wouldn’t let people pay a penny more” on their winter fuel bills as he unveiled the party’s plan to address the Tory cost of living crisis
The Labour plan would pay energy companies to cover the gap between what they would receive from customers and what they would have to pay for energy on the wholesale market.
In a round of media interviews on Monday, the Labour leader rejected the idea he had been too slow to propose a solution, given he was on holiday last week.
Under the proposals, the energy price cap would be frozen at the current level, meaning a planned 80 per cent rise in October, taking the average household bill to about £3,600, would not happen.
Launching the plan, Starmer said: “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 have a choice and this is really the political choice of the day. 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.”
How Labour would fund price freeze:
- Extending the scope of the windfall tax on energy companies by closing a loophole allowing tax relief on fossil fuel investment and backdating the tax to January, raising £8 billion.
- Halting the proposed £400 payments for all households offered by the government to compensate for the price cap rise scheduled for October, saving £14 billion.
- Lowering government interest payments on debt, saving £7 billion, which Labour said would be possible because its plan would reduce inflation by adding just two percentage points to inflation over the winter, instead of the six percentage points currently forecast.
In interviews Starmer said Labour had waited for price forecasts last week to make sure that their plan was fully costed.
Asked if he and his party should have acted sooner, Starmer said: “I think it was the beginning of July I said to my team, right I want a fully costed, comprehensive plan and I want to see whether it’s possible for us to freeze energy prices but I need a fully costed plan.
On Gordon Brown’s proposal to nationalise the power companies, he said: “If you go down the nationalisation route, then money has to spent on compensating shareholders and I think in an emergency like this, a national emergency where people are struggling to pay their bills, I think that the right choice is for every single penny to go to reducing those bills.
“Which is why we’ve gone for this across the board, freeze the prices, raise the money for that through the oil and gas companies who’ve made more profit than they were expecting and of course the additional benefit of our plan is that it reduces inflation by up to 4%.”
Starmer branded Boris Johnson a “lame duck” and the Conservative leadership contest an “internal battle”.
He said: “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 also refused to apologise for going on holiday: “I’ve got a very important job as leader of the Labour Party, as leader of the opposition, but I’ve also got another job that’s very important – I’m a dad.
"And I’m not going to apologise for going on holiday with my wife and kids. It’s the first time we’ve had a real holiday in about three years.”
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