Does the cap fit? Analysing Labour's £29bn bills plan

Sir Keir Starmer has proposed a massive £29bn package to cap energy bills at current levels, which he says will help tackle Britain's worsening cost of living crisis and bring down inflation.

- BEN CHAPMAN

The Labour leader claims that his "fully-costed" plan will reduce the rate at which consumer prices are rising by 4 per cent - a move that would have the added benefit of slashing the interest government pays on billions of pounds of debt that's linked to inflation.

But do Labour's figures add up and is this plan the best way to ease the pain of rising bills?

What is Labour proposing?

Labour would freeze the price cap on households' annual gas and electricity bills at the current level, which is equivalent to £1,971 for an average-usage household.

The freeze would remain in place for six months over the winter until 31 March next year when it is hoped warmer weather will ease the pressure on household bills. Without any action, energy regulator Ofgem is projected to increase the cap to around £3,600 on 1 October and £4,200 on 1 January.

Is Labour's plan 'fully costed'?

Clearly wary of his party's lingering reputation for profligacy, Starmer has been at pains to state that Labour's plan is "fully costed". He claims that £8bn will come from closing "absurd" loopholes in a windfall tax on oil and gas producers introduced in the spring and backdating the levy to January.

A further £14bn will come from money already earmarked by the government for support to cover energy bills and a further £7bn will be saved through cutting debt interest payments thanks to reduced inflation.