Labour Finally Breaks August Energy Crisis Silence

Guido hopes co-conspirators are sitting down when they read this: Labour has a policy. Not just a policy, a policy on a topic relevant to the national debate. Last night Shadow Chancellor Rachel Reeves announced that were Labour in a position to affect change, they would “finally end the injustice that sees people with energy prepayment meters paying over the odds for their gas and electricity.” Bringing prepayment energy prices into line with those for direct debit customers, they claim, will “provide relief to 4 million households”. The Mirror’s Dan Bloom, hardly a Labour-sceptical hack, has revealed the total amount this policy would save those on prepayment meters: £46 a year.

The same Labour complaining that Rishi’s £400 handout to every household, and up to £1,200 handout to the poorest isn’t nearly enough to help people through the winter has broken their silence with a package of support worth £46 a year at present. It’ll increase to a value of £84 under the October-December price cap, and £100 if the price cap rises to expected levels in January-March. Labour says this is “the first strand of a fuller package on the energy crisis”. This is a very low energy start to solving to the energy crisis

mdi-timer 12 August 2022 @ 10:45 12 Aug 2022 @ 10:45 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Team Rishi Deny that ‘Efficiency Savings’ are “Not Credible”

Last night Team Rishi set out his plan for mass additional cost of living support in the winter, without many details. Slamming Liz Truss’s tax cut plan as one that “won’t touch the sides” for most people in need of support, Rishi says he will be “prepared to act”. 

“I’m very clear about what is required to help people, and as soon as we know how much bills will go up by, I will act.

And it’s important for people to know how this extra support will be paid for. In order to keep any one-off borrowing to an absolute minimum I will first seek efficiency savings across Whitehall to provide direct support for families to help with the unprecedented situation we face.”

On the promise of paying for much of his future fiscal support through efficiency savings, his team said that, as Chancellor, Rishi instructed all departments to find efficiency savings to help fund additional spending to support Ukraine.

As Chancellor, Rishi did indeed scrape together cash from departmental efficiency savings. Every department – including devolved administrations – was asked to identify 1.5% of capital departmental expenditure limit (CDEL) underspends. The process, which according to a Treasury source, did work well, raised £1 billion for arms for Ukraine a few weeks ago. However, said source raised three major concerns about the plan:

  1. Given HMT has just performed this exercise, it lacks credibility to say there’s still “free” money sitting around in departments waiting to be repurposed
  2. Departments only managed to cobble together £1 billion from this recent exercise, which is a good amount for arms for Ukraine, however will equally not touch the sides of the cost of living crisis facing Brits this winter. The total package cost so far already amounting to £37 billion…
  3. On a purely inter-governmental relations level, some think repeating this process indefinitely across Whitehall, Scotland, Wales and Northern Ireland cannot be done without seriously fracturing relationships.

In response, Team Rishi say the OBR typically assumes that every year 8% of total government capital plans will typically go unspent and they’re merely saying that in a cost of living crisis that money should be put to immediate use support families, rather than simply returning to the Exchequer. Rishi says he wants his plan to involve as little “one-off borrowing” as possible. Clearly his opponents believe efficiency savings are not the answer to that objective…

mdi-timer 9 August 2022 @ 11:45 9 Aug 2022 @ 11:45 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments