Energy bills price cap freeze plan could save households £1,000 | Personal Finance | Finance
This comes as the latest forecasts from Cornwall Insights estimate that the energy price cap will hit £4,266 in January 2023. This would mean the expected 80 percent energy bill rise in two months’ time would not happen, saving the average household £1,000 annually, according to the Labour leader. In response to this, the Labour Party and Keir Starmer are divulging their vision for addressing the cost of living crisis amid criticism towards the perceived inaction being taken by the Government to these price cap forecasts.
As it stands, household energy bills are expected to soar to £3,600 in October under current predictions.
However, the energy price cap would be frozen at its current level under Mr Starmer’s new proposal.
This would mean the expected bill rise in two months’ time will not not place and save the average household £1,000 a year.
Currently, the energy price cap is set at £1,971 but families are being told to prepare for it to nearly double.
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Outlining his vision for addressing the prices at the weekend, the Opposition leader 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.
“We’ve had 12 years of Tory government that has failed to prepare and refused to invest, leaving bills higher and our country less secure.
“This is a national emergency. It needs strong leadership and urgent action.
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“Labour’s fully-funded plan would fix the problems immediately and for the future – helping people get through the winter while providing the foundations for a stronger, more secure economy.
“Only Labour can give Britain the fresh start it needs.”
Keir Starmer’s plan would reportedly cost £29billion over the winter months and would be funded through a variety of methods, according to Labour.
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These include expanding the windfall tax’s purview on energy companies which would raise £8billon.
On top of this, Mr Starmer is proposing the Government pauses the £400 energy bill grants being offered to households to mitigate the damage of the price cap hike, which would reportedly save £14billion.
The Labour leader is also proposing lowering Government interest payments on debt which would reportedly save £7billion and reduce inflation.
Other measures being suggested by Mr Starmer include insulating 19 million homes across the UK and closing a loophole in the Government’s energy profits levy.
Labour’s latest recommendations come during the Conservative leadership election between Rishi Sunak and Liz Truss.
Mr Sunak has already announced a plan to reduce energy bills for up to 16 million people, which includes the £400 energy bill grant, and aims to have the UK “energy dependent” by 2045.
In comparison, Ms Truss, has cited tax cuts as the best way to help with the cost of living crisis.
However, the foreign secretary does not support introducing a windfall tax on oil and gas firms’ profits.
