Keir Starmer defends Labour’s ‘robust and costed’ energy price plan
Keir Starmer has defended his pledge that families would not “pay a penny more” on energy bills this winter after unveiling a £29bn plan.
Under the proposals, Labour would freeze the energy price cap at £1971 for 6 months this winter saving households £1k.
It would be funded by extending windfall tax on profits and dropping the £400 energy rebate brought in by the current government.
The energy price cap is now set at £1,971 and it is expected to almost double in October, with a further increase expected in January. Economists and charities have said millions of households will be plunged into poverty as a result, or left unable to pay.
The Labour leader described his proposals to stop energy bills rising over the winter as a “very strong, robust, costed plan”.
He told BBC Radio 5 Live:
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.
It has an additional benefit which is really important, which is because energy prices are a real driver of inflation, this also makes sure that we can reduce inflation from what might even be 13% down to about 9%.
Welcome to today’s Politics Liveblog. I’ll be covering for Andrew Sparrow today. Do drop me a line if you have any questions or think I’ve missed anything. My email is nicola.slawson@theguardian.com and I’m @Nicola_Slawson on Twitter.
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Asked about the IFS’s comments on Labour’s plan, Keir Starmer told BBC Breakfast:
What Paul Johnson (IFS director) isn’t disputing is that our plan will reduce inflation, so he’s absolutely clear that, that is the case.
Of course what he’s rightly saying is what happens after April matters because you have to maintain measures to reduce inflation. Of course we have to do that in April when we see the circumstances, but what he’s not suggesting is that we’re wrong when we say that our plan will reduce inflation.
On food price inflation, the Labour leader said:
Well the thing about inflation is we’ve got to get inflation down altogether and that is why our plan is so important because it takes down inflation, but there are other measures that need to be taken on food etc to keep those prices down.
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.
We’ve been working on that for six or seven weeks…I’ve got a very important job as leader of the Labour party, leader of the opposition, but I’ve also got another job that’s really important and that is 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 for about three years.
Another £12bn needed to keep UK energy bills support at same level, says IFS
Mark Sweney
The government needs to spend another £12bn to maintain the scale of support pledged to help families cope with the cost of living crisis as the energy prices continue to soar, according to analysis by the Institute for Fiscal Studies (IFS).
The economics thinktank said that the additional funding will be needed to achieve the £24bn package of aid announced in May, largely because the forecast increase in energy prices over the next year has jumped from 95% to 141%.
This means that working age benefit claimants are now on course to see their real income fall by £620 over the year.
The IFS says that the government would need to double the current £650 grant to those on benefits to protect them, as well as help low income pensioners and families in work, at a cost of £5.5bn.
Similarly, the cost of maintaining the £150 council tax rebate and £400 energy discount will now cost the government another £7bn if it wants to continue to cover around half the increase in costs a typical family will be hit by over the year.
Paul Johnson, director of the IFS, said:
As prices of essentials including food, heating and fuel continues to rise, families on low-incomes are facing more uncertainty and pressures. The government is still playing catch up as inflation and the cost of energy continue to spiral upwards. Just achieving what they wanted to achieve back in May will cost an additional £12bn, and a package on that scale will still leave many households much worse off.
Full story: Labour announces plan to freeze energy price cap with reinforced windfall tax
Keir Starmer has put a beefed-up £8bn windfall tax on energy company profits at the heart of a new plan to stop people having to pay “a penny more” on fuel bills this winter.
The Labour leader confirmed that under his plan the energy price cap would be frozen at the current level, meaning that an expected 80% rise in October – taking an average household bill to about £3,600 – would not go ahead.
Starmer said the country was facing “a national emergency” and that Labour “wouldn’t let people pay a penny more” on energy bills as a result of his “fully funded plan”. A typical family would save £1,000, he claimed.
He said: “Britain’s cost of living crisis is getting worse, leaving people scared about how they’ll get through the winter. Labour’s plan to save households £1,000 this winter and invest in sustainable British energy to bring bills down in the long term is a direct response to the national economic emergency that is leaving families fearing for the future.”
Starmer said the plan would cost £29bn over the winter and that it could be funded by extending the scope of the windfall tax on energy companies (raising £8bn), halting the proposed £400 payments for all households offered by the government to compensate for the price cap rise scheduled for October (saving £14bn), and lowering government interest payments on debt (saving £7bn), which Labour said would be possible because its plan would reduce inflation.
Last week Sir Ed Davey, the Lib Dem leader, and Gordon Brown, the former Labour prime minister, called for the energy price cap to be frozen at its current level and released plans explaining how this could be funded.
This led to criticism that Starmer, who was on holiday at the time, was letting them, rather than the Labour leadership, set the agenda.
Starmer’s plan was released as it was reported that Boris Johnson was on his second foreign holiday of the summer. He was photographed with his wife, Carrie, in a town near Athens. Earlier this month the couple had a break in an eco-hotel in Slovenia.
The energy price cap is now set at £1,971 and it is expected to almost double in October, with a further increase expected in January. Economists and charities have said millions of households will be plunged into poverty as a result, or left unable to pay.
The government has not proposed suspending the energy price cap rise, but it has announced an array of measures intended to help people pay their bills, and Johnson has said he is certain that his successor will offer more help in the autumn.
But neither Liz Truss, the foreign secretary and frontrunner in the contest to replace him, nor Rishi Sunak, her rival and the former chancellor, are calling for the energy price cap to be frozen.
And although both of them have signalled that that they would offer extra cash support to households, neither have proposed a full plan to fund this other than through extra borrowing. Truss maintains that her real priority is cutting the tax burden.
Read more from my colleagues Andrew Sparrow and Phillip Inman here:
Brandon Lewis played down suggestions that Boris Johnson has “thrown in the towel” after reports emerged at the weekend that he was on his second holiday in two weeks.
The former Northern Ireland secretary told LBC: “Even when you are not in the office in Downing Street you are working.”
He added:
He’s probably in about his second week [of] holiday in the last year or so certainly this year. So while somebody is away whether they are secretary of state or let alone the prime minister, they will be continuing to work.
I can assure you he will still be going through inboxes, he will still be dealing with national security issues where relevant. Being out of the country does not mean the prime minister stops working.
Keir Starmer branded Boris Johnson a “lame duck” and the Conservative leadership contest an “internal battle”.
He told BBC Radio 5 Live:
Every family is facing these tax hikes, however well off or not well off they are, everybody is facing it. If you do it across the board and cut off the price rise before it happens, that has an impact on inflation and keeps inflation down and takes it down, now that’s to the benefit of everybody including those who are not so well off.
But whilst we’re cancelling parts of the government’s approach so far, the bit we’re not cancelling is the 650 to pensioners and those on Universal Credit, so that is targeted support we would keep…but the 400 would be gone because we’re saying – what the government is saying, well if the price goes up by 2,000 we’ll give you 400 towards it.
Well that’s not going to help those families. We’re saying we’re not going to let the price go up in the first place and so that’s how the 400 is catered for.
He added:
We’ve got to get a grip of 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’.
Keir Starmer defends Labour’s ‘robust and costed’ energy price plan
Keir Starmer has defended his pledge that families would not “pay a penny more” on energy bills this winter after unveiling a £29bn plan.
Under the proposals, Labour would freeze the energy price cap at £1971 for 6 months this winter saving households £1k.
It would be funded by extending windfall tax on profits and dropping the £400 energy rebate brought in by the current government.
The energy price cap is now set at £1,971 and it is expected to almost double in October, with a further increase expected in January. Economists and charities have said millions of households will be plunged into poverty as a result, or left unable to pay.
The Labour leader described his proposals to stop energy bills rising over the winter as a “very strong, robust, costed plan”.
He told BBC Radio 5 Live:
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.
It has an additional benefit which is really important, which is because energy prices are a real driver of inflation, this also makes sure that we can reduce inflation from what might even be 13% down to about 9%.
Welcome to today’s Politics Liveblog. I’ll be covering for Andrew Sparrow today. Do drop me a line if you have any questions or think I’ve missed anything. My email is nicola.slawson@theguardian.com and I’m @Nicola_Slawson on Twitter.
