Keir Starmer has said Labour’s plan to freeze energy bills, funded in part by an extended windfall tax, is the radical approach needed to help households and reduce inflation, contrasting it with inaction by a “lame duck” government.
In a round of media interviews on Monday morning aimed at taking the lead on the crisis, the Labor leader rejected the idea that he had been too slow to come up with a solution, given he was on holiday last week.
Under the proposals, the energy price cap would be frozen at the current level, meaning an expected 80% rise in October, which would bring the average household bill to around £3,600, would not take place.
Asked why he was spending nearly £30bn on a scheme that also helped the wealthiest, Starmer said that while some other targeted measures would remain, his was the best overall approach.
“We asked ourselves: Do we want a plan that allows these prices to go up, causes this anxiety and then discounts some people after the event, but does nothing about inflation, or do we want to be more radical, more? bolder, more ambitious?” he told BBC Radio 4’s Today programme.
“One of the advantages of our proposal is that it lowers inflation, which benefits everyone, but especially the most vulnerable and the less well-off.
“So I will make no apologies for a scheme which is comprehensive, which has a cost, which has the dual benefit of removing these price rises and which is an effective anti-inflation measure.”
Paul Johnson, of the economic think tank the Institute for Fiscal Studies, has questioned whether the jobs plan would help inflation much, saying the rate would rise again once the energy subsidy ends.
Asked about this in another interview, with ITV’s Good Morning Britain, Starmer argued that it would, however, help with inflation over the winter.
“What [Johnson] he is rightly saying that what happens after April matters, because the measures to reduce inflation must be maintained”, he said. “Of course we should do it in April when we see the circumstances.”
An existing plan to give an extra £650 to pensioners and those on universal credit would remain in place, Starmer said, and the party would also press ahead with changes to pre-paid meters, used by many of the most vulnerable households economically
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In the long term, he said, Labor would spend billions of pounds insulating homes so people needed less energy.
Starmer contrasted his plan with Boris Johnson’s lack of action amid competing plans by the two candidates to replace him, Liz Truss and Rishi Sunak.
“The Conservative party has not made that choice,” he told Good Morning Britain. “He can’t make that choice. Because all we’ve seen from them is infighting between leadership hopefuls, who are arguing about how terrible they’ve been in government, and a prime minister who’s a lame duck.”
Labor says the plan could be funded by extending the scope of the energy business tax, stopping the proposed £400 payments for all households and reducing the government’s interest payments on the debt due to the reduction of inflation.
Starmer has faced criticism for how long it has taken Labor to publish its plan. A week ago, the Liberal Democrats said the rise in energy prices must be stopped, while last week former Labor Prime Minister Gordon Brown set out his own plan for the crisis.
Brown took what was seen as a veiled jab at Starmer, who was away at the time, saying crises “don’t take a holiday”.
Asked about the comment, Starmer told BBC One’s Breakfast program 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 have a very important job as leader of the Labor party, leader of the opposition. But I also have another job that is very important, and that is that I am a father.
“I’m not going to apologize for going on vacation with my kids. It’s the first time we’ve had a real vacation in about three years.”
Brown’s plan also calls on ministers to consider the temporary nationalization of 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 household bills across the country, not to compensate energy company shareholders.”