Keir Starmer’s response to the Prime Minister’s announcement on energy prices

Thank you, Mr Speaker. Can I thank the Prime Minister for advance sight of her opening speech. We are in the middle of a national emergency. People are scared. Families don’t know if they can warm their homes this winter and businesses ask if they can keep the lights on. That is why the Labour Party spent the summer fighting for a price freeze. So that no household would pay a penny more on their bills.

When we called for it, many people said we were wrong. They pretended that this crisis was something that just affected the poorest, as if working families on average wages could easily shoulder astronomical bills.  They dismissed our call for support as “handouts.”

But these objections could never last, the Prime Minister had no choice. No Government can stand by while millions of families fall into poverty, whilst businesses shut their doors and the economy falls to ruin. So, I am pleased there is action today and that the principle of a price limit has been accepted. But under our plan not a penny more on bills, under their plan, a price rise. 

But this support does not come cheap. And, the real question before the House today, the real question the Government faces, the political question, is who is going to pay?

The Treasury estimates that energy producers could make £170bn in unexpected windfall profits over the next two years. I repeat that, £170bn in unexpected windfall profits over the next two years. The head of BP has called this crisis a “cash machine” for his company, and households are on the other end of that cash machine, their bills funding these eye-watering profits. That’s why we’ve been calling for a windfall tax since January. And it’s why we want to see the windfall tax expanded now.

But the Prime Minister is opposed to windfall taxes. She wants to leave these vast profits on the table with one clear and obvious consequence: the bill will be picked up by working people.

She claims that a windfall tax will deter investment. That’s ridiculous. 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.  Don’t just take my word for it, asked which investments BP would cancel if there was a windfall tax, the Chief Executive said: “none.” None. His words, not mine. 

The Prime Minister’s only argument against a windfall tax falls apart at first inspection, laying bare that she’s simply driven by dogma. And it’s the working people that will pay for that dogma. 

Every pound the Prime Minister’s government refuses to raise in windfall tax, and she’s leaving billions on the table, is an extra pound of borrowing.  That's the straightforward, simple argument. Loading the burden of the cost-of-living crisis onto working people who will have to pay back for years to come.

This is the basic political divide. They want to protect the excess profits of the oil and gas and energy companies. We want to protect working people. Ask voters whether they think it’s fair whether they pick up the bill, or those companies making profits they didn’t expect to make, and there's only one answer to that question. It’s a very simple question of whose side are you on. 

And I’m afraid this isn’t a one-off. Because not only is the Prime Minister refusing to extend the windfall tax. She’s also choosing to cut corporation tax - an extra £17 billion in tax cuts for companies that are already doing well. That means handing a tax cut to the water companies polluting our beaches. Handing tax cuts to the banks. Handing a tax cut to Amazon.

She’s making that choice. Even though households and public services need every penny they can get, working people are paying for the cost-of-living crisis. Stroke victims wait an hour for an ambulance and criminals walk the streets with impunity. It’s the wrong choice for working people. It’s the wrong choice for Britain.

Everybody in this House recognises that profits are needed for investment in all businesses. In this  case these are unexpected profits that were not expected to be made. When the Chief Executive of BP says it will not deter investment, it’s a bit rich for those opposite to disagree. He is the Chief Executive. 

Mr Speaker,  The immediate cause of this energy crisis is Putin’s grotesque invasion of Ukraine. We stand united in our support for Ukraine. If we are to defend democracy, defeat imperialism and preserve security on the continent. Putin’s aggression must fail. And whatever other political differences we may have, the Prime Minister will always have my support in that common endeavour.

But we must ask ourselves why we are we so exposed to changes in the international price of oil and gas? Why are we so at the mercy of dictators able to pull the plug on wells and shut down pipelines? Why is there such a fundamental flaw in our national security?

It’s about a failure to prepare. A failure to increase our energy independence. A failure to rapidly decrease our reliance on fossil fuels. They banned onshore wind in 2015. That cost us clean energy capacity equivalent to all our Russian gas imports in recent years. A policy disaster.

The Prime Minister has been constantly opposed to solar power, the cheapest form of energy we have. And she has been consistently wrong.  It’s not just the Prime Minister’s words this summer in the heat of an internal campaign. When she was Environment Secretary the Government slashed solar subsidies. The market crashed.

Nuclear is vital to our future, and a new generation of power plants should have been built by now. Yesterday the Prime Minister desperately tried to blame Labour. I remember the exchange in 2006 where Prime Minister Blair said “I’m pro-nuclear” and David Cameron didn’t know where to look. If you haven’t seen the clip, have a look. I’m pro-nuclear, David Cameron didn’t know where to look. The uncomfortable truth for members opposite is this, the last Labour Government gave the go-ahead for new nuclear sites in 2009.  In the 13 long years since, not even one has been completed. 

Let me turn to home insulation, which reduces energy consumption like nothing else. We have the draughtiest homes in Europe. The last Labour Government set about fixing that. Then the Party opposite said cut the green crap and the whole project all but collapsed. Installation rates down by 92 per cent. Utterly short-sighted. And it is costing millions of households £1,000 a year on their energy bills right now.

The Prime Minister is right to recognise that immediate support needs to be combined with longer-term action. But I’m afraid fracking and a dash for gas in the North Sea will not cut bills. Nor will they strengthen our energy security.m But they will drive a coach and horses through our efforts to fight the looming climate crisis. She shakes her head. But she should listen to her own Chancellor sitting next to her. What did he have to say on fracking just a few months ago? Now this is a long quote and I have tried to cut it down, but every sentence is worth repeating. His words. 

“Those calling for its return misunderstand the situation we find ourselves in… if we lifted the fracking moratorium, it would take up to to decade to extract sufficient volumes - and it would come at a high cost for communities and our precious countryside.”

I go on, because this is so good. 

“Second, no amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price any time soon. And with the best will in the world, private companies are not going to sell the shale gas they produce to UK consumers below the market price. They are not charities.” 

Spot on. And what did the Chancellor say about North Sea gas? “Additional North Sea production won’t materially affect the wholesale price”.  Indeed, earlier this year his department helpfully put out a series of mythbusters. Here’s one:

“MYTH: Extracting more North Sea gas lowers prices”

“FACT: UK production isn’t large enough to materially impact the global price of gas”.

I’ve printed the Prime Minister a copy here. We do need to carefully manage our existing resources in the North Sea. And the industry has an important role to play in our future as we transition to different forms of energy. But doubling down on fossil fuels is a ludicrous answer to a fossil fuel crisis.

And if all countries took her new Energy Secretary’s position,  of squeezing “every last drop” out of their fossil fuel reserves, global temperatures will rise by a catastrophic three degrees. That will be devastating for our planet and future generations.

And it’s totally unnecessary.  New wind and solar power are now nine times cheaper than gas. I want to repeat that. 9 teams cheaper. Because some people are still living in the world where renewables are more expensive than fossil fuels. The reverse is now true. So, we need a clean energy sprint, urgently accelerating the rollout of offshore wind, onshore wind, solar, nuclear, hydrogen, and tidal. And last year I set out a new national mission to insulate 19 million homes and cut bills for good.  If the Government had taken me up on that challenge, two million homes would already be insulated this winter. 

Britain needs a fresh start. We need a government that will never leave working people to pick up the tab for excess profits in the energy industry. We need a government that plans for the long-term rather than leaving us badly exposed to the whims of dictators. And we need a government that will drive us forward to energy independence rather than doubling down on fossil fuels. The change we need is not the fourth Tory Prime Minister in six years. It’s a Labour Government.