Liz Truss has suggested that Labour’s energy plan amounts to “sticking plasters” on the issue of soaring household bills.
Speaking to broadcasters ahead of the seventh Conservative Party hustings in Perth this evening, the Tory leadership frontrunner said her priority is “reducing taxes” which will “solve this problem for the long term”.
The foreign secretary also referred to windfall taxes as “arbitrary”.
On Monday, Sir Keir Starmer unveiled Labour’s plan to keep soaring household bills down by freezing the energy price cap.
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The Labour leader said his proposal would be paid for by introducing a new windfall tax on oil and gas companies’ profits without the “major tax loophole” the government’s current policy has.
Sir Keir said his “radical” plan “will take us through the winter” and accused the government of “saying absolutely nothing”.
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He continued: “The fear is that if the government doesn’t step up, the prices, the average will go up from £2,000 or so to £3,500, then up again to £4,200.
“We’re saying we’ll hold that back, we won’t allow those prices to go up and we’ll make sure that those that are actually making a lot of profit out of this pay for holding those prices down.
“And that is the sort of plan that I think people are very, very receptive to.”
The plan has been criticised for helping everyone with their bills, not just low-income households, but Sir Keir said that would help lower inflation.
However, the Institute for Fiscal Studies (IFS) questioned Labour’s explanation as to how it would fund the support package, with think tank’s director Paul Johnson telling BBC Radio 4’s Today programme that the party’s plan to cancel the energy price cap rise – if extended from the proposed six months to a year – would cost as much as the COVID furlough scheme.
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Ms Truss said that Labour’s policy of placing increased taxes on oil firms’ profits would “put off investors” investing in the UK.
“Now, my priority is reducing taxes so people can keep more of their own money at the same time as making sure we boost energy supply,” she told broadcasters.
“It’s wrong to just keep sticking plasters on this problem.
“What we actually need to do is make sure we are unleashing more energy, for example, from the North Sea.
“We’re investing in technologies like nuclear, and we’re finding more renewable energy as well.
“We need to solve this problem for the long term.”
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Asked if she would rule out any further windfall tax on oil and gas companies, Ms Truss continued: “I’m not in favour of windfall taxes because fundamentally what they do is they put off investors into our country and what we need is we need jobs and growth.
“We need more opportunities for fantastic people, for example, investing in this distillery – we need to attract more of that.
“If we have arbitrary taxes, that puts off investment and it stops growth in the long term.”
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Mr Sunak has unveiled a plan to slash rising energy bills for up to 16 million vulnerable people, which he hopes will propel him to 10 Downing Street.
While a spokesperson from the former chancellor’s campaign team accused Ms Truss’s energy plan of being “as clear as mud”.
“It’s not good enough to say wait until late September. Families need certainty now – bills are going to go up and wages have taken a hammer blow from rising inflation,” they said.
“Liz needs to come clean on her cost of living plans so pensioners and hard working families know now if they will lose out.”
Yesterday, the PM’s official spokesperson confirmed that Mr Johnson is on leave this week and that no further interventions to ease cost of living pressures will be made until his successor is appointed on 5 September.
Energy analysts have predicted that typical energy bills could rise to approximately £3,500 in October and more than £4,200 in January.
The government has announced households will receive £400 to help pay fuel bills this autumn.
