Andy Burnham has pledged to intervene more heavily in Britain’s energy market and accelerate efforts to reduce household electricity bills, as the prime minister set out plans to overhaul the state pension to help fund a National Care Service.
Addressing the Labour conference, Mr Burnham said his government would seek to “reform a broken energy market” and reduce the link between domestic electricity prices and international gas markets.
“This means reforming a broken energy market so it better serves the public interest,” he said.
“We are already taking more control of our electricity prices with a massive expansion of home-grown, renewables and nuclear.
“I have asked Miatta [Fahnbulleh, the energy secretary] to speed up the breaking of the link between what we pay for power at home and the international gas market to get bills down.”
The pledge comes as governments across Europe continue to debate how far electricity prices should reflect volatile international gas markets, even as renewable and nuclear generation expands.
Mr Burnham acknowledged that households facing high costs could not wait indefinitely for longer-term reforms.
“People can’t wait forever for change,” he said.
“They need breathing space now and I am determined to provide it.”
The prime minister pointed to one immediate measure announced shortly after entering Downing Street, telling households that VAT would be removed from their electricity bills from Thursday.
“You will see VAT disappear off your electricity bill this Thursday,” he said, prompting a standing ovation from delegates.
The measure, announced on July 21, is expected to save households about £45 a year and takes effect on October 1.
“I didn’t expect a standing ovation for that, but I’ll take it,” Mr Burnham said, before thanking delegates.
The prime minister then turned to social care, describing the system as a longstanding failure of his generation of politicians.
He said he had been determined to improve care since entering politics, but that the system had deteriorated.
“If anything, it’s worse today than it was then. What an indictment of my generation of politicians, myself included.”
Reflecting on the death of his father earlier this month, Mr Burnham praised care workers who had looked after him.
“Caring for other people’s parents on poverty pay, but doing it with huge skill, humour and humanity,” he said.
“Holding a threadbare system somehow together yet invisible to the political class of this country.”
“I want to speak directly today to our care workers. You are not invisible to me.”
Mr Burnham subsequently confirmed that his proposed National Care Service would be partly funded through changes to the state pension from 2030.
He said Labour would honour its manifesto commitment to maintain the triple lock until the end of the current parliament. The mechanism currently increases the state pension by whichever is highest of inflation, average earnings growth or 2.5 per cent.
From 2030, however, Mr Burnham said the system would be “adjusted”.
“From then, the state pension will continue to rise every year at least by prices or 2.5%,” he said.
“And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation.
“This change will generate significant savings, which we will use to build up our own National Care Service.”
Acknowledging the political consequences, Mr Burnham said he understood the change could prove controversial.
“I may pay a political price,” he said, but added that “someone has to go through the pain barrier and rip the plaster off”.
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