Labour demands energy price cap freeze amid rising cost of living

Starmer’s party joins Lib Dems in calling for October freeze, as Treasury considers plan to reduce cap

Keir Starmer is expected to announce energy price cap freeeze on Monday (Getty Images)

Sir Keir Starmer is set to demand that the energy price cap is frozen at the current level this autumn, saving consumers from a huge hike in their annual gas and electricity bills.

The Labour leader is expected to unveil the plan on Monday in a bid to prevent the regulator Ofgem from hiking the cap from its current level of £1,971 to an anticipated £3,600 in October.

It comes amid reports that the Treasury has drawn up a multi-million pound package to help households with their rising energy bills.

Under plans previewed in The Sunday Times, the chancellor Nadhim Zahawi is considering a lending scheme for energy firms that would cut the energy price cap by £400 in January.

However the new scheme would not be implemented fast enough for October. And there is no guarantee that Tory leadership hopefuls Rishi Sunak and Liz Truss would take up this plan if they became PM.

Labour’s new policy, first reported by The Observer, comes after experts predicted that energy bills could soar to more than £5,000 by April next year, placing further pressure on already struggling households.

A Labour source said the choice for the party had been between more targeted support for the most vulnerable, or stopping October’s price energy price hike. “It seemed best to stop the rise happening in the first place,” said the senior figure.

“We would end the injustice that sees people on prepayment meters paying over the odds for their energy,” Starmer wrote in the Sunday Mirror. “And we will set out how we would help people directly this winter in the coming days.”

Sir Keir has faced pressure in recent days over his perceived lack of action after former Labour PM Gordon Brown called on the government to implement “urgent measures” to cover rises in fuel bills.

Mr Brown said Boris Johnson should unite with the foreign secretary Ms Truss and former chancellor Mr Sunak to prepare and agree on an emergency budget.

The former prime minister also spoke out on Monday, where he claimed there is a “vacuum” at the centre of government which has stopped it from tackling the crisis.

He said: “There’s got to be someone in charge. And it’s not just that they’re asleep at the wheel – there’s nobody at the wheel at the moment.

“What’s happening at the centre of government is there is a vacuum and it’s got to be filled immediately if we’re going to protect people by October.”

Research by the Institute for Public Policy Research (IPPR) think tank has found that an energy price cap freeze would help get inflation under control, as well as easing the burden on families.

New polling for the Liberal Democrats – who called for an energy price cap freeze earlier this week – has found that seven out of 10 Tory voters support a freeze on October’s price cap rise.

A group of 70 charities and community groups signed a letter calling on the two Tory leadership candidates to commit to a doubling in the £1,200 package of support going to the most vulnerable households.

Dan Paskins from Save the Children, said: “At the very least, the government should double the emergency support package announced in May to ensure families are shielded from a catastrophic winter.”