Starmer bungled in failing to target his energy bill support
There was an amusing interlude during BP’s announcement of bumper profits earlier this month when the chief executive, Bernard Looney, was asked what he planned to do with the £400 rebate on his energy bill that would arrive courtesy of the cost of living support package that Rishi Sunak, then chancellor, announced in May. Looney appeared unaware that he, like everybody else in the UK, would get the discount automatically from October. It was only later that BP offered the PR-friendly answer that its £4.4m-a-year boss would make a donation to charity.
Looney’s bafflement was understandable. High earners like him (and, indeed, high earners collecting considerably less) obviously don’t need assistance from the state in paying their energy bills this winter. There was no sound economic reason for Sunak to add a universally applied £400 element to a package that was otherwise rightly concentrated on vulnerable households, meaning those most affected by higher bills.
That point, bizarrely, seems to have been lost on Sir Keir Starmer. The Labour leader has opted to back the most untargeted form of support this winter – a plan to freeze the price of energy for all consumers, rich and poor alike, at its current level for six months.
The idea is popular, we’re told, because three out of four Tory voters support it. In that sense, it may represent smart politics: the next prime minister will be under pressure to adopt chunks of the proposal, including the increase in the windfall tax on North Sea oil and gas producers. But the economics of freezing energy prices for all households, as opposed to only those least able to afford higher prices, makes little sense.
Starmer’s scheme has the virtue of simplicity, it could be argued – and,
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