Labour will cut energy bills for the 4million poorest customers using prepayment meters, the Shadow Chancellor has said.
Rachel Reeves said the party would end the “unjustifiable” practice of charging people who pay by pre-payment meter more than those who have a direct debit.
However, the change would not be nearly enough to stop bills soaring overall.
On the current price cap - set to rise in October - the difference is worth only £46 a year. Currently the price cap is £1,971 for direct debit customers and £2,017 for those who pre-pay for energy.
Labour said the saving would likely be £84 a year from October and £100 a year from March, when bills skyrocket overall.
Labour would reimburse energy firms for the cost of cutting pre-paid bills, costing around £113m between October and March. The party insists this would be paid for by closing "gaps" in the Tories' energy windfall tax.
The party has been mulling over proposals to help struggling households with skyrocketing inflation and the energy crisis.
Keir Starmer has faced calls to announce more, and Labour is due to unveil a further plan next week - though Sir Keir is not expected to give a speech himself.
Labour's leader will break cover today after a summer break and is expected to be asked about the crisis.
Former Prime Minister Gordon Brown has been leading attacks on the Government, ramping the pressure on them to even attempt to try and solve the crisis.
Keir Starmer is set to make several announcements next week on how to tackle the deepening cost of living crisis.
Analysts have predicted that typical energy bills could rise to approximately £3,500 in October, and more than £4,200 in January.
Ms Reeves, Mr Starmer and Shadow Energy Secretary Ed Miliband are understood to have been working the plans ahead of the August Ofgem price cap.
Ms Reeves said: “It’s outrageous that people on prepayment meters have to pay more for their energy.
"Why should those with the least have to pay more to heat their homes and put the lights on? This is unjustifiable and morally wrong.
“As energy prices spiral, this unfair prepayment premium must end. Labour would make sure that no-one pays over the odds for the same gas and electricity that everyone else gets, as well as taking broader action to help people manage their bills over the winter.”
She added: “We’re in the midst of an energy emergency that is only going to get worse."
It is understood Labour would eliminate the gap between the two price caps and reimburse energy companies for the difference over the winter, estimated to cost around £113 million between October and March.
This would be paid for through a strengthened windfall tax on oil and gas companies, which the opposition claims currently has a “loophole” which allows energy giants to exploit it in order to pay less tax.
It comes after the outgoing Prime Minister appealed to the energy chiefs to help ease cost-of-living pressures.
Boris Johnson said after the roundtable meeting: “We will keep urging the electricity sector to continue working on ways we can ease the cost-of-living pressures and to invest further and faster in British energy security.”
However, there was no announcement of any immediate new measures to help consumers.
Shadow Chancellor Rachel Reeves writes exclusively for the Mirror
Gas and electricity prices are going up and up - people are worried sick about how they’ll heat their homes and put the lights on over the winter.
But the four million households in Britain who pay for their energy with a prepayment meter face an even bigger challenge.
Not only are they unable to spread the cost of gas and electricity over the year, they’re also forced to pay a higher price for the very same gas and electricity that everyone else gets.
This is outrageous, and needs to end now.
It’s especially immoral when you hear that people on prepayment meters typically have less than half the disposable income as people who pay monthly.
Even before the energy crisis, prepayment customers were struggling – one in seven went without energy because they had no credit.
That means they had no lights, no oven, no hot water and no heating.
Imagine what it’s going to be like for people now.
Labour would end this injustice and make sure people on prepayment meters never again pay over the odds for their gas and electricity.
But we know that more action is needed. We’re in the midst of an energy emergency that is only going to get worse.
That’s why Labour would act now to bring bills down, paid for by extra tax from the oil and gas producers who are making eye-watering profits.
Over the next few days, Labour leader Keir Starmer will say more about our plans to give people the security they need.
The Conservatives have lost control of the economy and have nothing to offer.
They need to get a grip and take urgent action, but instead they’re too busy fighting each other to do what’s right for the country.
Only Labour will do what it takes to get us through this national emergency, and build the stronger, more secure economy Britain deserves.
