Earlier this month, the Government announced plans to cap energy prices to protect further stratospheric increases.
This move was inevitable. For context, energy prices have already increased by almost 90% since February 2020, and that’s before we enter the winter months with prices forecast to rise further. So even though Government intervention is welcome, it is very long overdue.
Labour spent the whole of the summer urging the Government to announce a price cap, and were time and time again refused. Instead of reassuring consumers and small businesses, the Tories were too busy bickering over who would be the next into Number 10. Now, suddenly, Liz Truss and her Government seem to have had an overnight conversion to Labour’s proposal.
What is bizarre, however, is the way that the Government is intending to pay for the cost of capping energy. So far, the Government has yet to set out how it intends to fund the estimated £150bn bill that the cap will cost.
Labour have been clear on how we would fund a cap; by implementing a comprehensive windfall tax on energy producers who are making obscene profits, by lowering Government interest payments on debt (possible because of reduced inflation resulting from the cap) and by strengthening our at-home energy resilience.
The Government’s plan is to essentially borrow the money. What does that mean? It means that the taxpayer will be footing the bill. It means that those making ridiculous profits will continue to make them, while we (and given the scale of the debt, probably our children) hand over the cash for years to come.
Liz Truss was given two options: back working people, or back multi-million-pound corporations. She has chosen the latter.
The people of Tameside have had to deal with an extraordinarily difficult two-and-a-half years and are now seeing their prices go through the roof. To hand them the bill for the price freeze – when you could give it to companies who are making more money than they know what to do with – is not just practically foolish, but also morally irreprehensible.
Government intervention is needed, but this must be done fairly. We already have the highest tax burden since the 1940s, it’s now time for energy producers to step up and put some money in the coffers.
I’ll continue to make this argument robustly in Parliament. Hopefully, this Government sees sense, and stands up for the people it claims to represent.