Government accused of ‘broken promises’ over VAT on energy bills

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Labour has accused the Government of backpedalling over promises to cut VAT on energy bills amid rising costs.

Communities Secretary Michael Gove pledged to “look at a range of options” in order to help those struggling.

But he avoided questions on whether the Government would consider cutting VAT in order to help billpayers, despite saying during the Brexit referendum that leaving the EU would allow the country to do so.

Writing in The Sun in 2016, Mr Gove and the Prime Minister promised fuel bills would “be lower for everyone”.

They wrote: “In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive… when we Vote Leave, we will be able to scrap this unfair and damaging tax.”

On Monday, Mr Gove said support must be targeted to those who need it most.

But Labour’s shadow climate change and net zero secretary Ed Miliband, said: “Broken promises don’t pay the bills.

“Both Boris Johnson and Michael Gove promised to cut VAT on energy bills. But when push comes to shove, when families and pensioners really need support, they’ve broken that commitment.

“While Michael Gove backpedals, Rishi Sunak is missing in action.”

Conservative Party Conference
Communities Secretary Michael Gove (Peter Byrne/PA)

Mr Gove said it was important to “look at a range of options” and said there was already support in place.

He told Sky News: “I think we should always seek to cut taxes where we can but also it’s important when we are providing support for people that we also target it most on those who need it most.”

Asked if therefore cutting VAT on energy bills was something he would support, Mr Gove said: “Well, you know, in my view, the more we can cut taxes the better, but at this point, I think that the prudent and the responsible thing to do is to recognise that we need to take a balanced approach and a balanced approach means that when we can support, we provide support most for those in the most difficult circumstances.”

Mr Miliband said: “Labour would give families security by immediately cutting VAT on energy bills now – part of our plan to save households around £200 or more, with extra support for those feeling the squeeze the most, paid for by a windfall tax on oil and gas companies facing record profits.

“A Labour government will invest in renewables, nuclear and upgrading homes to solve the long term problem that the Conservatives have created in our broken energy system.”

No 10 said the Government recognised there were “increased costs on things like both food and fuel” globally.

The Prime Minister’s official spokesman said: “We have a wide array of measures already in place to help those most in need, be it the UC (Universal Credit) taper, the rise in the minimum wage, the energy price cap, or the half a billion pound Household Support Fund, and as the Prime Minister has again confirmed today we are all looking at further ways to abate costs on things like energy prices.”

But he said he did not have a timeframe of when extra help could come.

He said the Prime Minister had “led a number of meetings” on the issue, and he added: “Certainly the challenges of things like global energy prices are things they discuss on a regular basis and they’ll continue to do so.”

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