Working people will pay for Liz Truss’s “dogma” as she refuses to expand a windfall tax on energy producers to fund her new cost-of-living support package, Labour has said.
Opposition leader Sir Keir Starmer also suggested that the Prime Minister was not on the side of voters, as she expected them to foot the bill for the measures, rather than oil and gas companies.
Conservative former prime minister Theresa May meanwhile welcomed the extra support announced by Ms Truss, and called for the rollout of further energy efficiency measures.
“These vast profits are not the reward of careful planning. They are the unexpected windfall from Putin’s barbarity in Ukraine. There is no reason why taxing them would affect investment in the future.”
The Labour leader quoted the boss of BP as saying a windfall tax would not impact on investments it would make, adding: “The Prime Minister’s only argument against the windfall tax falls apart at first inspection.
“Laying bare that she is simply driven by dogma, and it’s working people that will pay for that dogma.”
Sir Keir later told the Commons: “Ask voters whether they think that it is fair that they pick up the bill, or those companies that make profits they didn’t expect to make, and there is only one answer to that question.
“It is a very simply question of whose side are you on?”
But she called on ministers to go further, adding: “Britain led the world through the industrial revolution, if we grasp the opportunity now, we can lead the world in a cleaner, greener form of growth.”
Mrs May added: “We are still building homes with gas boilers. Doesn’t it make sense to actually change the regulations because those homes will have to be retrofitted in just a very few years time?”
Conservative former energy secretary Dame Andrea Leadsom said a mass insulation programme was the most important step that could be taken to reduce energy bills.
She also suggested help could be offered to turn down thermostats on people’s boilers in a bid to cut energy bills, telling the Commons: “There’s a lot more we could do as a Government, for example, by going house-to-house, through energy suppliers… to assist people with looking at how they can reduce their own energy bills.
“There are many, many practical ways not least of which some great ideas for turning down the thermostat on your boiler – don’t do this yourselves at home – to make more effective our use of energy, and secondly things like turning down the hot water tap pressure to actually reduce people’s energy bills.”
Liberal Democrat leader Sir Ed Davey told the Commons the Prime Minister’s energy plan was not a “freeze on people’s energy bills”, as they will be limited to £2,500 rather than the current price cap of £1,971.
He explained: “In the middle of a cost-of-living emergency, the Conservatives are choosing to put energy bills up by another £500 for struggling families.
“This hike in people’s energy bills comes on top of the £700 rise we saw last April. Struggling families were paying twice as much for energy as they were last year. People will still be desperately worried about how they’re going to keep warm this winter.
“And I suppose the £400 discount simply won’t make up for this enormous rise in energy bills. So where is the new support for families and pensioners who are struggling?”
SNP Westminster leader Ian Blackford agreed that “setting the cap at £2,500 isn’t an actual freeze”.
He added: “Instead of a windfall tax, she has chosen a new Tory tax, the Truss tax. The Truss tax that means that in the months and years ahead households and businesses will be punished with higher bills, higher interest rates and higher mortgage costs.”
Ms Truss had earlier announced that the average household energy bill will be frozen at no more than £2,500, saving the typical household around £1,000 from October.
For businesses and other non-domestic users such as schools and hospitals, which have not been covered by the existing price cap, a six-month scheme will offer equivalent support.
Ms Truss told the Commons: “I can tell the House today that we will not be giving in to the Leader of the Opposition who calls for this to be funded through a windfall tax.
“That would undermine the national interest by discouraging the very investment we need to secure homegrown energy supplies.”