Three quarters of Tory voters back Sir Keir Starmer’s plan to freeze energy bills as ministers come under pressure to do more to address the “national emergency” of living costs.
Chris Smyth www.thetimes.co.uk
The Labour leader will set out a £29 billion plan today to prevent energy bills rising for six months, as polling indicates big majorities in favour of this idea and windfall taxes that Liz Truss’s team said would raise the risk of recession.
Dozens of charities also warned yesterday that children would go hungry if ministers did not double their existing support package to cover energy bills.
Greg Hands, the energy minister, said the government was “working up further options for this winter” to present to a new prime minister and acknowledged that “more is going to have to be done”. Both the Tory leadership contenders — Truss, the foreign secretary, and the former chancellor Rishi Sunak — have rejected freezing bills completely.
Hands criticised Labour’s “magical solution to just wish it all away”, saying price increases could not be “abolished” and that freezing bills would “inevitably lead to higher taxes”.
A winter freeze on bills is understood to be one of the measures being examined by officials but government sources said they would “be surprised if the Treasury recommend that” when options are given to Nadhim Zahawi, the chancellor, this week. He is understood to favour a plan to cut bills by £400 through government-backed loans replacing some extra charges to consumers.
Truss is prioritising tax cuts and has promised targeted help for the poorest, and Sunak is planning higher payments to pensioners and those on benefits as well as scrapping VAT on energy bills.
YouGov polling for The Times suggests a public appetite for more radical measures, with only one in eight people saying that they can afford rising energy bills without reducing their standard of living.
Seventy-five per cent support fixing the cap on energy bills even if it means more government borrowing, with 8 per cent opposing. This includes 75 per cent of those who voted Tory in 2019, with 12 per cent opposed. Big majorities in all parts of the country and all age groups back the plan, with little difference between Leavers and Remainers.
Starmer will promote a similar plan in media interviews today and a visit to the southwest of England designed to put pressure on Truss, Sunak and Boris Johnson. He is promising to cancel October’s price cap rise as well as one due in January, arguing it will save households £1,000 in the winter. At present bills are capped at an average of £1,971 a year but this has been forecast to exceed £4,000 over the colder months.
Starmer said people were “scared about how they’ll get through the winter” arguing that his plan was “a direct response to the national economic emergency that is leaving families fearing for the future”.
Labour says that it would pay for the plan by backdating the windfall tax imposed in May to January, closing loopholes in it and scrapping £400 payments to all households that would no longer be needed. The party also argues the freeze would save £7 billion in debt interest payments by reducing inflation driven by rising energy bills.
Critics say the proposals would mean big handouts to wealthy voters, but Labour sources argue that bills are rising so much there are now relatively few families who will not need help.
Voters are split on whether support should be means-tested, backed by 40 per cent, or applied equally to all households, favoured by 47 per cent, according to polling of 1,781 adults on Thursday and Friday.
Ranil Jayawardene, the trade minister who is backing Truss, told Times Radio: “If we don’t stop calls for windfall taxes . . . we will head for the recession that the current economic model is set out to deliver right now.”
Hands, who is backing Sunak, said that the former chancellor was “not afraid to commit big numbers”, but insisted he would not be “showering money around”.
Save the Children, Age UK and Macmillan Cancer Support are among 70 charities urging the next prime minister to increase the help available. In a letter to Truss and Sunak, they say that three quarters of those on benefits have already had to choose between heating and eating and that means-tested support “should be at least doubled” from the £1,200 pledged in May. The Institute for Fiscal Studies has estimated that rising bills mean another £12 billion will be needed to keep the promises made in the spring.