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
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