Keir Starmer today sparked a backlash from parts of the left as he rejected calls to nationalise the big energy firms.
Labour’s leader announced a £29bn plan to freeze bills at their current level of £1,971 a year through the winter, and refused to rule out more spending from April 2023.
The £29billion would be handed to energy firms to make up the difference between soaring wholesale costs and what they charge.
Yet Sir Keir rejected calls to nationalise the big energy firms – long called for by many on the left.
“Common ownership” of energy was one of the 10 pledges Keir Starmer made during the Labour leadership campaign, which said: “Public services should be in public hands, not making profits for shareholders”.
But he told BBC Breakfast: “The choice we’ve made in our plan is every single penny that’s needed for this plan will go directly to reducing the bills of families up and down the country.
“If you go down the nationalisation route, then money has to be spent on compensating shareholders.
“And I think in an emergency like this, a national emergency where people are struggling to pay their bills, I think the right choice is for every single penny to go to reducing those bills.”
UNISON general secretary Christina McAnea said Labour’s plans were a “positive start to deal with the cost-of-living crisis, reduce bills and control inflation”.
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But Unite general secretary Sharon Graham said “selling off our energy sector to the private profiteers has ended in tears” and “a piecemeal approach won’t work.”
She added: “Only days ago BP announced that in April to June this year it had made almost £7 billion profits.
“On the same day it was being openly contemplated that household energy bills in the UK could rise to £3,600 a year.
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“Labour’s new plans – although a step forward from what’s been proposed until now – only address the second part of this dichotomy. Not the first.”
Hilary Schan, co-chair of the left-wing pressure group Momentum, said: “Instead of proposing to shell out tens of billions of pounds subsidising energy companies, Labour should be arguing for public ownership, at a fraction of the price.
“It’s the common sense solution, backed by most voters, and the best way to keep soaring bills down. This ideological commitment to privatisation is out of step with all electoral and policy logic.”
Former prime minister Gordon Brown last week called for the temporary nationalisation of energy firms as a “last resort” if they fail to keep bills low.
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The TUC has claimed nationalising the ‘Big Five’ energy retail companies – British Gas, E.ON, EDF, Scottish Power and Ovo – would cost £2.85 billion.
Labour unveiled its bills plan – funded by an expanded windfall tax on oil and gas giants – today and called for Tory leadership hopefuls Rishi Sunak and Liz Truss to go further.
Sir Keir told the Mirror: “It’s about whose side are you on? Where do you stand where you’ve got these companies making these huge profits and families suffering every day?”