People will be “fearful for the future” when energy price cap rises, Healey says

John Healey has said people will be “fearful for the future” when the energy price cap increases on Friday after a recent forecast predicted that the cap would rise to more than £3,500 in the autumn.

Consultancy Cornwall Insight released its latest projections for the price cap on Monday. Its estimate for the cap from October fell marginally on its previous projection, from £3,583 to £3,553.

But the company predicted that the price cap could rise to £4,649.72 in January, compared to last week’s forecast of £4,266. Its projection for April’s cap also increased considerably, with the company now forecasting that annual energy bills could top £5,300 in the spring.

Speaking to Sky News this morning, the Shadow Defence Secretary reiterated Labour’s call for the price cap to be frozen at its current level of £1,971 until April next year, declaring that the move would “give people a clear-cut, fully-costed plan”.

The Labour frontbencher said: “When this price cap is put up on Friday, people will genuinely be fearful for the future and they’ll be completely unclear about the leadership candidates and our future Prime Minister. Will they help? Who will they help? How will they help?

“And there is an alternative. We’re urging the government to adopt Labour’s plan and actually bring back parliament early, so that we can legislate to put that in place, so that people have a degree of certainty for the future. When you’re managing a tight budget, a certainty about the costs you face means a lot.”

Labour set out its plan to support people with rising energy bills last week. The opposition said its proposals – which would cost £29bn – could be pay for in part by making changes to the windfall tax the government has imposed on the excess profits of oil and gas companies.

Healey stressed this morning that “nothing” about the windfall tax prevents companies from making the profits that they anticipated spending on re-investment and the green energy transition, declaring: “This is about unearned, massive profits, which could instead go to help households through this winter.”

BP reported earlier this month that its profits had tripled to nearly £7bn in the second quarter of the year, while British Gas owner Centrica announced in July that its operating profits for the six months to the end of June were £1.34bn – well above the £262m reported for the same period last year.

Shell revealed that it made record profits of £9.5bn between April and June – an increase of 26% on the first quarter of this year, which was a previous high. The company plans to give shareholders payouts worth £6.5bn.

Labour demanded last week that parliament be recalled early from recess to pass legislation to freeze energy bills before the announcement of the new price cap.

Labour said the announcement of the updated cap was a “crucial deadline” for the government to adopt the opposition’s plan to freeze energy bills, which the party said would save the typical household £1,000.

A poll, conducted by Opinium on behalf of campaigning organisation 38 Degrees, found that the vast majority of the public are in favour of freezing energy bills until April 2023, with 85% of Conservative voters backing the proposal.