Keir Starmer said he would freeze the energy price cap. How did the left react?
With energy bills expected to top £4,000 in January, Labor leader Keir Starmer has announced how he would tackle the crisis if he were in government.
Starmer said he would freeze the energy price cap so the hikes in October and January wouldn’t happen. The Labor Party claimed it would save the average household £1,000 on their bills.
Labor calculates it would cost £29billion, which the party says could be partially funded by expanding the windfall tax on oil and gas giants.
The policy has been welcomed by organizations and influential figures on the left.
The progressive Institute for Research on Public Policy (IPPR) think tank said “this is the scale of intervention we need”. Luke Murphy, IPPR’s associate director for climate and energy, said: “These proposals would prevent soaring energy bills from pushing millions into debt and misery, and contain ever-increasing inflation. increasing, which constitutes a risk for the economic stability of the United Kingdom. This is the scale of intervention we need to see from the government, as well as stronger support for the lowest income households.
“Freezing the price cap buys time to accelerate the race for clean energy, to intensify a national renovation program to reduce energy demand and to reform the energy market – the interventions necessary to reduce our reliance on costly, climate-destroying gas.”
The anti-privatization group We Own It has said, “Starmer is right to promise an additional tax on oil and gas profits to fund an energy price cap freeze.” The group points out that Norway’s ‘permanent windfall tax’ means they have a $1.4 trillion sovereign wealth fund to pay 80% of people’s bills above a price cap.
Dawn Butler, left-wing Labor MP describe as an “important political announcement”, and said it represented “serious policies for serious times”.
However, others on the left have called on Starmer and Labor to go further and questioned the utility of handing over £29billion of public money to private energy companies.
Former Shadow Chancellor John McDonnell tweeted“Freezing energy bills is a good move, but a short-term solution of giving £29billion of public money to energy companies with nothing in return no control, no ownership, no reform and no return here in 6 months Nothing more for the poorest to meet existing bills.
Left-wing economist James Meadway said: “That’s the right position to take.” However, he added that it must be accompanied by “public ownership, tax on windfall profits, reform of the price cap”, arguing that “a freeze delays the problem a little but that the whole system must be overhauled”.
Labor peer Prem Sikka made similar remarks. He welcomed the policy, but argued that “This must be accompanied by a 100% clawback of excess profits from oil, gas and energy companies Nationalization of the energy sector. Redistribution to end poverty.
More extensive criticism has come from economic justice campaign Richard Murphy. Murphy has critical the policy of only providing relief for six months, and because, “the fundamental flaw of [the] plan is that it only addresses the problem for households. There’s no mention of how schools, hospitals and care homes will pay their bills, or how many businesses will survive this winter.
Unite general secretary Sharon Graham was also somewhat critical. She said: ‘Just a few days ago BP announced that between April and June this year it made almost £7billion in profit. On the same day, it was openly speculated that household energy bills in the UK could reach £3,600 a year. Labour’s new plans – although a step forward from what has been proposed so far – only address the second part of this dichotomy. Not the first.
“These figures prove that the UK economy is not working for workers and their families. Britain’s real crisis isn’t rising prices – it’s an epidemic of unfettered profits. Energy companies, such as Scottish Power, owned by Spain’s Ibedrola, or the French public company EDF, own huge chunks of our energy supply. It seems that public ownership is only advertised as long as it is not owned by the British. »
Starmer ruled out bringing energy companies into the public domain during his broadcast tour this morning. Carla Denyer, co-leader of the Green Party of England and Wales said that Starmer was “wrong to say that it is better to support the Big 5 energy suppliers than to make them public”. She went on to say that it was “clearly more cost-effective and sensible” to put energy suppliers in the hands of the public.
Chris Jarvis is Head of Strategy and Development at Left Foot Forward
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