Tory leadership rivals dismiss Labour plan to freeze energy costs

Both Tory leadership contenders have dismissed Labour proposals to freeze energy prices for all consumers over the winter.

Labour wants to spend £29bn to stop the energy price cap going up for all households later this year.

But Rishi Sunak said any extra support should be targeted at "the most vulnerable".

Rival Liz Truss called the idea a "sticking plaster," and argued tax cuts are a better route to help with costs.

Under Labour's plan, the government would foot the bill to keep the price cap at £1,971 a year for typical households between October and March.

It says it would be paid for by cancelling £400 energy payments for all households, and extending the current windfall tax on oil and gas firms.

The party has also argued its blueprint would bring down inflation overall, leading to lower costs to service government debt.

But speaking ahead of a Tory leadership hustings in Perth, former chancellor Mr Sunak said he would not implement Labour's plan if he wins power, adding: "It's right that we target extra support to those who are most vulnerable".

"Those on the lowest incomes and pensioners should be the ones who get the additional help," he added.

He has suggested spending £5bn on further targeted payments to pensioners and the low-paid, as well as cutting VAT on domestic energy to deliver saving.

Meanwhile his leadership rival Liz Truss has said her priority if she becomes the next PM would be cutting taxes and "making sure we boost energy supply".

She has not ruled out further payments over the winter, but says her plan to temporarily ditch green levies and reverse April's National Insurance rise will save families hundreds of pounds.

Asked about Labour's plan, she said it would be "wrong to keep sticking plasters on this problem" adding that "unleashing" more energy from the North Sea, nuclear and renewables was required to "solve this problem for the long term".

Labour Leader Sir Keir Starmer, has said the government has "no plan, and no answers" over the increase in energy prices, after official figures showed pay rises lagging behind inflation.

Speaking on a visit to Swindon, Sir Keir said ministers were serving in a "zombie government" who had "absolutely no plan, no answers to what they're going to do about the energy increase in October and then again in January."

He added: "We've basically got the choice; we either allow the oil and gas companies to continue to make huge profits whilst millions of households are really struggling or we do something about it."

The difference in approach over how best to handle the energy crisis has led to an increasingly heated war of words between the two leadership candidates.

Mr Sunak has said the tax cuts offered by his rival won't help pensioners and the low-paid enough, warning that millions could be left at risk of destitution without further direct payments.

Ms Truss has dismissed Mr Sunak's plans as "Gordon Brown economics" and said her plans to help people through tax cuts are more in line with Conservative values.

Neither candidate to replace Boris Johnson as prime minister has indicated they plan to extend the windfall tax on oil and gas companies, as suggested by Labour.

The Treasury is working up options to help with prices over the winter, but a final decision will be left to the next occupant of Downing Street.