Sir Keir Starmer has set out Labour’s £29bn contingency plan to halt the surge in winter energy bills – paid in part by an extension of the windfall levy on oil and gas company profits.
The Labor leader said that under his party’s “fully funded” proposals, consumers would “not pay a penny more” for their gas and electricity in the coming months, saving the average household £1,000.
He said his plan was in direct response to a “national economic emergency” that left millions of families across the country fearful of how they would deal with it.
However, the Institute for Fiscal Studies (IFS) questioned Labour’s statement on funding the support package, saying some of its proposals were an “illusion”.
As well as freezing the energy price cap at its current level of £1,971 for the average household, Sir Keir said a Labor government would insulate 19 million of the coldest homes over the next decade and cut bills further.
This is a national emergency. It needs strong leadership and urgent actionUnion leader Sir Keir Starmer
The party said scrapping planned price cap hikes – which was set to rise to over £3,500 in October and over £4,000 in January – would cut inflation by 4% and make future rate hikes less likely.
She said the price freeze would mean she would not go ahead with the £400 reduction in energy bills that the Government promised to all households in October to help cushion the impact of rising prices.
Sir Keir said Labor has also committed to action to increase Britain’s energy security, doubling onshore and offshore wind capacity, investing in solar, tidal and hydrogen and pushing new nuclear capacity.
His intervention will increase pressure on Tory leadership contenders – Liz Truss and Rishi Sunak – to spell out what they would do to help families struggling with rising bills if they become prime minister.
Sir Keir said: “Britain’s cost of living crisis is worsening and people are worried about how they will weather the winter.
“We’ve had 12 years of Tory government unprepared and refusing to invest, making the bills higher and our country less secure.
“This is a national emergency. It needs strong leadership and urgent action.
“Labour’s fully funded plan would solve the problems now and into the future – helping people get through the winter while laying the foundations for a stronger, safer economy.”
To pay for the measures, Labor said it would close a “loophole” in the levy on energy companies’ profits, which Mr Sunak announced in May when he was Chancellor, backdating the start to January, along with increase in global prices would bring in £8 billion.
Labor said £14bn would come from other measures, such as scrapping the £400 energy rebate and forgoing pledges from Tory leadership contenders – like ending the “green levy” on fuel bills that Ms Truss is proposing or the Scrapping VAT on domestic fuel bills Mr Sunak has promised.
And by keeping inflation low, which it said would peak at around 9% rather than the 13% the Bank of England is forecasting, the party said it would push the government’s debt interest payments by a further 7% reduce billions of pounds.
However, IFS Director Paul Johnson warned that inflation would pick up again quickly after subsidies ended, meaning the cost of servicing debt would also rise.
“It’s an illusion in the sense that it will reduce interest debt payments in the short term, but if you don’t keep these kinds of subsidies going on, they’re not going to reduce them in the long term. Inflation will be higher later,” he told the Daily Telegraph.
Labor also presented a business support package with a £1billion emergency fund to support energy-intensive industries – such as ceramics, glass and steel – and an increase in the corporate tax threshold for small businesses.
The party said it would be funded by an increase in the Digital Services Tax (DST) rate this year, raising at least £2billion from the most profitable global tech giants.
https://www.belfasttelegraph.co.uk/news/uk/starmer-vows-to-extend-windfall-tax-to-freeze-family-fuel-bills-41911569.html Starmer vows to extend windfall tax to freeze family fuel bills