Plans to burden public with higher bills would be “grossly unfair”, Lammy says

Elliot Chappell

David Lammy has warned that plans to pay for a freeze in gas and electricity bills that “burden the general public with higher bills in the years ahead” would be “grossly unfair” as Liz Truss prepares her proposals for energy.

In a Sky News interview this morning, the Shadow Foreign Secretary told viewers that it took the Conservatives “months and months and months” to “copy” Labour’s windfall tax policy after the party suggested the measure in January.

Liz Truss, who was revealed as the victor in the Tory leadership election on Monday and entered No 10 on Tuesday, is expected to present her new cabinet with a plan to freeze energy bills at the present cap of £1,971. Industry experts have estimated that the proposal could cost around £150bn.

Labour announced last month a plan to freeze energy bills until April 2023. The party said the proposal could be paid for in part by making changes to the windfall tax, including backdating the tax to include excess profits made since January and closing a loophole allowing tax relief on investment in the North Sea.

Lammy said: “I welcome Liz Truss’ Damascene conversion if she adopts our policy but the devil will be in the detail. Is she in fact going to burden the general public with higher bills in the years ahead and get the money that way, which I think would be grossly unfair and not benefit the wider economy?

“Or is she going to do what we said – which is ensure that the North Sea oil [and gas] high profits that they’ve made, profits that they weren’t predicting, actually contribute to freezing those bills?”

On Labour’s proposal, Lammy said: “Our proposal was for the next six months, that was the emergency period that we were addressing and we costed our proposal. What’s been speculated in the media is that Liz Truss has a plan for two years, which is obviously a lot more money and that’s why we’re seeing money above £100bn.”

He argued that his party had “driven” the debate on supporting the general public with energy costs, adding that he is “glad to see Liz Truss coming with us”, and that the “dividing line” now is how a package of support is funded.

“The key issue is who pays. Is it ordinary, working people or is it those with the broadest shoulders?” he asked.

“Talking about unfunded tax cuts, talking about a reduction in corporation tax, all suggests that her interests are actually with the wealthy and she’s going to make those who are working pay for it – and that’s what we will be opposing.”

BBC News reported on Tuesday that the government is considering freezing bills at the current rate for approximately 18 months, funded by government-backed loans to energy suppliers, which would be repaid by additions to customers’ bills over the next one to two decades.

According to Bloomberg, Truss’ proposal would see energy suppliers required to charge households a reduced rate for their energy, with the government guaranteeing financing to cover the shortfall.

The website reported that energy companies had been receptive to the idea, as it would mean that they would dodge a windfall tax, with the cost of the plan instead being covered by the taxpayer. Bloomberg has also reported that Truss is planning a separate £40bn support package to help businesses with rising energy bills.

Everything Labour.
Every weekday morning.

By clicking ‘subscribe’ you confirm you have read and agree to our privacy policy

More from LabourList

Donate to fund our journalism

or

Subscribe to our Daily Email