Keir Starmer has said Labour’s plan to freeze energy bills, funded in part by an expanded windfall tax, is the radical approach needed to help households and reduce inflation, contrasting it with the inaction of a “lame duck” government.
In a round of media interviews on Monday morning intended to seize the initiative on the crisis, 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% rise in October, taking the average household bill to about £3,600, would not happen.
Quizzed on why he was spending close to £30bn on a scheme that also assisted better-off people, Starmer said that while some other targeted measures would remain in place, his was the best overall approach.
“We asked ourselves: do we want a plan that allows those prices to go up, causes that anxiety, and then rebates some people after the event, but doesn’t do anything about inflation, or do we want to be more radical, more bold, more ambitious?” he told BBC Radio 4’s Today programme.
“One of the benefits of our proposal is that it brings inflation down, which benefits everybody, but particularly those who are most vulnerable, and those who are least well off.
“So I’m not going to apologise for a scheme which is comprehensive, which is costed, which has the double benefit of eliminating those price rises, and which is an effective measure against inflation.”
Paul Johnson, of the Institute for Fiscal Studies economic thinktank, has queried whether Labour’s plan would help greatly with inflation, saying the rate would go up again once the energy subsidy ended.
Quizzed about this in another interview, with ITV’s Good Morning Britain, Starmer argued it would nonetheless help with inflation over the winter.
“What [Johnson] is rightly saying is that what happens after April matters, because you have to maintain measures to reduce inflation,” he said. “Of course, we’d have to do that in April when we see the circumstances.”
An existing plan to give an extra £650 help for pensioners and those receiving universal credit would remain in place, Starmer said, and the party would also push ahead with changes to pre-payment meters, used by many of the most financially vulnerable households.
In the longer term, he said, Labour would spend billions of pounds insulating homes so people needed to use less energy.
Starmer contrasted his plan with the lack of action from Boris Johnson amid competing plans from the two candidates to replace him, Liz Truss and Rishi Sunak.
“The Conservative party hasn’t made that choice,” he told Good Morning Britain. “It can’t make that choice. Because all we’ve seen from them is internal squabbling between the leadership hopefuls, who are all arguing about just how awful they have been in government, and a prime minister who is a lame duck.”
Labour says the plan could be funded by extending the scope of the windfall tax on energy companies, halting the proposed £400 payments for all households, and lowering government interest payments on debt due to reduced inflation.
Starmer has faced criticism for the time it has taken for Labour to put out its plan. A week ago, the Liberal Democrats said the energy price cap rise should be stopped, while last week the former Labour prime minister Gordon Brown set out his own plan for the crisis.
Brown took what was seen as a thinly veiled swipe at Starmer, who was away at the time, saying crises “don’t take holidays”.
Asked about the comment, Starmer told BBC One’s Breakfast programme that his team had been working on the plan for more than six weeks.
He added: “The second part of my answer is this: 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.
“I’m not going to apologise for going on holiday with my kids. It’s the first time we’ve had a real holiday for about three years.”
Brown’s plan also calls for ministers to consider temporarily nationalising energy suppliers, as happened with banks during the 2009 financial crisis.
Starmer rejected this, telling Today: “In an emergency like this, I think every penny should be used to reduce the bills of households across the country, not used to compensate shareholders in energy companies.”
