The loan shark Chancellor is loading the costs of Tory failure onto working people

People across the country have seen energy bills shoot up in recent months – and we all know they are set to soar in April. For months, we have been challenging the Conservatives to do something to help. Labour has published a fully-funded plan to give all households £200 off their bills, along with extra targeted support giving a total of £600 for those who need it most. 

Our plan would see VAT on energy bills removed for a year, a big increase and extension of the Warm Home Discount, and it would be funded with a one-time, one-off windfall tax on North Sea oil and gas profits. Yet Sunak has rejected our plan – despite it offering help to people struggling, and despite Shell and BP announcing billions in bumper profits in the recent days.

Instead, the Chancellor has come up with a plan of his own – one that will land the costs once again on families. He is forcing a £200 loan onto all billpayers, and offering an extra £150 for people in properties in council tax bands A – D. It’s not enough – and it’s not even all it seems.

The Prime Minister himself doesn’t seem to understand what he’s signed himself up to, as we saw from his bluster in PMQs this week. He and the Conservatives are handing out billions of pounds of taxpayer cash to energy companies, and then forcing families to pay it off in instalments for years to come.

Here are five ways the Conservative’s energy offer falls down, and how his approach will fail to give people the help they need: 

1. It’s a buy now, pay later loan: the Chancellor’s £200 offer is a loan that you will have to pay back. Like a dodgy loan shark, he wants people to pay it back over five years even if their wages fall in the meanwhile, or if energy bills rise further still. What’s more, it looks like some people will have to pay it back even if they didn’t benefit from the initial loan because they moved house in the interim. In contrast, the £200 off everyone’s bills in Labour’s plan is fully funded upfront, paid for by that one-off windfall tax on oil and gas profits.
2. The extra help is badly targeted: the extra £150 in the Chancellor’s plans goes to homes in council tax bands A – D, and so is based on property values from over 30 years ago. That means its beneficiaries will include Justin Bieber and the Sultan of Brunei – whilst 12% of the poorest households live in a home that is not in council tax band A-D and so will miss out on getting this money directly. In contrast, our £400 extra help would go straight to the 9.3m households in the country who need it most.
3. Nothing for the long term: We’re facing a far worse energy crisis than other countries because a decade of the Tories’ failures have left us uniquely exposed to the global gas crisis – the cutting of gas storage, failures of regulation, a lack of investment in renewables and nuclear, and no movement on insulating homes. In the UK we have the worst insulated homes in Western Europe. We urgently need to insulate housing across the country to keep bills down and reduce emissions. Yet the Conservatives’ landmark scheme, the Green Homes Grant, has been abandoned and not replaced. In contrast, we have set out a ten-year plan to invest £6bn a year in insulating 19 million homes, which would cut their bills by £400 per year. We’ll also invest in the renewables and nuclear we need, and regulate our market better – so we’re never again in the position of dozens of companies going bust in the space of weeks.
4. Nothing to help businesses on the edge: the Chancellor has promised nothing in recent weeks to help businesses struggling with energy costs. We know firms are finding it difficult – and we know this hits people in their pocket too, as record numbers of manufacturers have been raising prices. In contrast, our plan includes a £600m contingency fund to provide support to the hardest-hit businesses and in energy-intensive industries.
5. Even the £200 loan will be wiped out by April’s tax on working people: the Conservatives are hiking National Insurance on working people by 10% this April. This tax rise means for some the whole loan will be gone in one fell swoop. We have argued and voted against this tax rise on working people. It is the worst possible tax rise at the worst possible time.

It looks like the Chancellor only announced his loan package because the calls for him to do something were getting too loud for him to ignore. But scratch the surface, and it is clear he and the Prime Minister are failing to offer people the help they need, whilst also failing to make oil and gas producers pay some of their bumper profits toward helping people struggling across the country.

Instead, whether through this energy loan or the tax rise this April, the Tories are loading the costs of his failure on working people again and again. The Conservatives have no answer to the cost of living crisis, because they are the cost of living crisis.