‘may cost £60 billion’

Labour’s plan to tackle the energy bills crisis could end up costing £60 billion, leading economists said on Monday.

The Institute for Fiscal Studies said the cost of the proposal could eventually double from Labour’s estimate of £30 billion over six months.

It also warned of a potential multi-billion-pound hole in funding for Sir Keir Starmer’s plan to freeze the domestic energy price cap at its current level of £1,971 from October to April.

But the IFS added that Labour had done more than the Government or either of the Tory leadership candidates in detailing proposals to stop millions of families being hit with energy bills rising to more than £3,500 in October before possibly smashing through the £4,200 level early next year.

Sir Keir, who has faced criticism for not building a bigger Labour poll lead given the Government’s woes, said that Britain was in the grip of a “national emergency” due to energy bills sky-rocketing following Vladimir Putin’s invasion of Ukraine.

He took to the airwaves this morning to lay out Labour’s £30 billion plan. But IFS director Paul Johnson said: “They would want to do that, I would have thought, for at least a year, so you would be looking at £60 billion. You are looking at the cost of furlough. What it does achieve is to protect everybody entirely from the increases in energy prices. That is a very expensive thing to do.”