Starmer pledges to freeze fuel bills by extending wind tax

Sir Keir Starmer has laid out a “very powerful, robust and high-cost plan” to prevent energy bills from rising over the winter – paid in part by an extension of the wind tax on the profits of oil and gas companies.

The Labor Leader said the £29 billion plan to tackle the “national emergency” would freeze the cap on energy prices at current levels of £1,971 for six months from October, saving saving the average household £1,000.

He contrasted Labour’s proposal with Prime Minister Boris Johnson’s inaction and “internal war” in the Tory leadership race, increasing pressure on candidates Liz Truss and Rishi Sunak in the election. explaining how they will help struggling families with high bills. .

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

“We have a choice and this is really the political choice of the day. We allow oil and gas companies to continue making huge profits, that’s what’s happening at the moment or we do something about it.

“We, the Labor Party, have said we will do something about it. We’re going to stop those price hikes, and we’re going to extend the income tax on profits that oil companies don’t expect. So we’ve got a very strong, robust, cost-effective plan here that will stave off price spikes this fall. “

Sir Keir added that the removal of planned increases in the price cap would keep inflation down, seeing it peak around 9% instead of the 13% forecast by the Bank of England, making the rise interest rates in the future are less likely.

He criticized the Government and Conservative leadership hopefuls, both of whom opposed an income tax extension.

We’re going to stop those price spikes, and we’re going to extend income taxes on profits that oil companies don’t expect.

“We have to embrace it because what we have right now are two Tory leadership candidates fighting each other in an internal war where their main argument seems to be about poor performance. theirs in the Government. and a Prime Minister is a lame duck because he admits there is a problem with the 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 of how it would fund the support package.

The think tank’s director, Paul Johnson, said the party’s plan to cancel the increase in the energy price ceiling – if extended from the proposed six months to a year – would cost as much as the Covid furlough plan.

He told BBC Radio 4’s Today’s Today programme: “What it achieves, of course, is to completely protect people from the rise in energy prices, so if that’s what you want to achieve then that’s what you want to do. to do, but you need to realize. It’s a very expensive thing to do.”

He added that it would be “correct this year” that this would reduce inflation and interest on government debt payments, but warned the average inflation rate would be flat over that assuming time. only a temporary allowance, “so that’s not really saving… in the long run”.

Tory leadership candidates Rishi Sunak and Liz Truss (Jonathan Hordle/ITV/PA) (PA Media)

In response, Sir Keir told BBC Breakfast: “What Paul Johnson does not dispute is that our plan will reduce inflation…

“Of course what he’s saying is right that what happens after April matters because you have to maintain the measures to bring down inflation.”

When asked about the potential length of the freeze, he said the situation would have to be assessed in April according to forecasts.

He said other measures “on food, etc. will be needed to keep prices down” and insulate 19 million homes over the next decade.

The Labor leader has been under pressure to lay out how his party will tackle the worsening cost of living crisis, with former prime minister Gordon Brown last week calling for an emergency budget, freeze price ceilings and temporarily nationalize energy companies if they refuse to lower their bills.

Asked if he and his team should have acted sooner, Sir Keir said he wanted a “comprehensive, full-cost plan”.

“We did it for six or seven weeks… I had a very important job leading the Labor Party, leading the opposition, but I also had another job that was really important and that was me. “I’m a father and I won’t apologize for going on vacation with my wife and kids, this is the first time we’ve had a real vacation in about three years. “

Sir Keir rejected calls to nationalize energy companies, saying: “If you go down the path of nationalization, then money has to be spent to compensate shareholders and I think in an emergency like like this, a national emergency where people are struggling to pay their bills, I think the right choice is to spend every penny to reduce those bills.”

The Labor leader said his party would not go ahead with the £400 rebate on energy bills the Government promised all households in October, saying: “We will not let the price go up in the first place and so that’s how £400 is catered for.

“While we are canceling parts of the Government’s approach so far, the part that we are not canceling is £650 for pensioners and Common Credit users, so that is targeted support that we will retain.”

Sir Keir said Labor was also committed to taking measures to strengthen the UK’s energy security, doubling onshore and offshore wind capacity, investing in solar, tidal and hydrogen power. , while bringing in new nuclear capacity.

Labor Leader Sir Keir Starmer has said Labor will not ‘let people pay a dime more’ on their winter fuel bills (Danny Lawson/PA) (PA wire)

To pay for the measures, Labor said it would close a “gap” in taxing the profits of energy companies that Mr Sunak announced in May when he was prime minister, and pushed back the deadline. period starting into January, along with a global increase. The price will bring in 8 billion pounds.

Labor said £14bn would come from other measures such as reducing the £400 energy discount and reneging on commitments made by Tory leadership candidates – such as stopping a “green tax” for the fuel bill, which Ms. Truss is proposing, or eliminate the VAT on domestic fuel bills that Mr. Sunak has promised.

And by keeping inflation low, the party says it will reduce Government debt interest payments by £7 billion.

Former Northern Ireland secretary to the Conservatives Brandon Lewis called Labour’s energy proposal a “poor policy”, failing to address “fundamental problems” as he touted the tax cut plan. by Mrs. Truss.

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