Cost-of-living crisis: Labour energy cap freeze would save Scottish families £2.6bn

Labour’s proposals to immediately freeze the energy price cap would save Scottish families £2.6 billion, the party’s shadow chancellor has claimed.

Rachel Reeves said the plans to stop energy price rises this winter would save the average household in Scotland £1,000.

Prices would be frozen at their current level of £1,971 instead of the planned 80 per cent increase to £3,582 in October announced by energy regulator Ofgem.

It comes as outgoing Prime Minister Boris Johnson said Britons faced with tough times ahead, but should have a sense of “hope and perspective”.

Shadow chancellor Rachel Reeves. Picture: Kirsty O'Connor/PA Wire

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Mr Johnson highlighted the announcements already made, which will see £1,200 going to the eight million most vulnerable households.

But he added: “Whichever of the two candidates gets in next week, what the Government is also going to do is provide a further package of support for helping people with the cost of energy.

“What we’ve got to do is get through the tough months – and I’m not going to shrink from this, it is going to be tough in the months to come, it’s going to be tough through to next year.”

The price increase in gas is being driven by Vladimir Putin’s invasion of Ukraine, Mr Johnson said during a visit to Dorset.

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“We’re going to get through it,” he said. “We’re taking 26 per cent more of our own gas from the North Sea than we did last year. We’re much less dependent on Putin’s supplies.”

Under Labour’s proposals, additional measures include removing the premium penalty for customers on a pre-payment meter.

The plan would include off-grid homes and the £29 billion package would be “fully funded” by additional taxes on oil and gas companies.

Constituencies such as Rutherglen and Hamilton West will receive £49 million from the plan, while Airdrie and Shotts residents will benefit from £39m, according to proposals.

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Ahead of a visit to Catapult, a leading innovation and research centre for offshore renewable energy, in Levenmouth, Fife, Ms Reeves also criticised the UK and Scottish Government’s efforts to tackle the cost-of-living crisis.

She said: “Families across Scotland are scared about how they’ll get through the winter with bills through the roof.

“Scotland is being failed by two absent governments. The Tories are missing in action while the SNP are acting more like commentators than a government.

“Labour’s plan to save households in Scotland £1,000 this winter and invest in sustainable British energy to bring bills down in the long-term is a direct response to the national economic emergency that is leaving families fearing for the future.”

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These plans will extend further into the future, with the party calling for all homes in the UK to be insulated over the next decade.

And she has urged the Scottish Government to back an emergency cost-of-living act set out by Scottish Labour.

She continued: “Scottish Labour have set out how the SNP Government can use the powers they have now to deliver an Emergency Cost-of-Living Act to help people through this crisis.

“Labour’s fully funded plan would fix the problems immediately and for the future, helping Scottish people get through the winter while providing the foundations for a stronger, more secure economy.”

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A Scottish Government spokesperson said they would not be commenting on the release.

However, Alison Thewliss, the SNP’s Treasury spokesperson, urged Labour to stop “shouting from the sidelines whilst standing shoulder to shoulder with the Tories at every opportunity”.

The SNP MP said: “These plans do not go nearly far enough for the thousands of families who are already suffering – the energy price cap rise needs to be cancelled immediately, not down the line when it will already be too late for thousands of households.

“Whilst the SNP Scottish Government is doing what it can with its limited powers – like spending £84 million on the Scottish Child Payment – people across Scotland are being let down by the inaction of a broken, out of touch Westminster system which Labour is protecting at all costs.”

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An HM Treasury spokesperson said: “We know that rising prices are impacting people in Scotland and across the UK, which is why we we’ve already taken action to help households with £37 billion worth of support throughout the year, which includes specific support to help people through the difficult winter ahead.

“Eight million of the most vulnerable households will see £1,200 extra support, provided in instalments across the year, and everyone will receive £400 over the winter to help with energy bills.

“That’s including a record fuel duty cut and a national insurance cut worth up to £330 a year for the typical employee.

“We have also provided the Scottish Government with a record £41 billion settlement for the next three years.”

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