Labour challenges Tories to scrap VAT on energy bills for a year

·3-min read

Labour is set to pile extra pressure on the Government over the rising cost of living by challenging MPs to back up past promises on cutting VAT.

In an opposition day debate in the Commons on Tuesday, the party will put forward a motion which, if passed, would force MPs to vote on the proposals.

And Labour’s shadow climate change and net zero secretary Ed Miliband said it was time to support families through the “growing cost-of-living crisis”.

Labour has proposed slashing VAT on energy bills for a year, alongside a windfall tax on the North Sea oil and gas industry, to help support those struggling as energy prices rise.

But the Government has so far resisted making moves on VAT, and Education Secretary Nadhim Zahawi said oil and gas companies were “already struggling”.

However Labour says the industry was expected to report a near-record income in 2021/22.

They pointed to previous pledges made by members of the Government on VAT on energy bills, including Prime Minister Boris Johnson and Levelling Up Secretary Michael Gove.

Writing in The Sun in 2016 they said that leaving the EU would allow the UK to scrap VAT on energy bills, calling it “unfair”.

If backed, Labour’s binding motion would guarantee time in the Commons for a Bill on cutting VAT.

The party said this could come into effect alongside expanding the Warm Homes Discount to 9.3 million people.

It comes after fuel poverty charity National Energy Action warned heating costs for the average home could double since last winter.

Mr Miliband said: “The Government and all the Tory MPs who have previously backed a VAT cut on home energy bills should follow through with their promises and vote with Labour today to scrap the tax for a year, as hard-working people face a growing cost-of- living crisis.

“The Conservatives’ clear opposition to the windfall tax tells you exactly whose side they are on – and it’s not the British people struggling with their energy bills.

“It tells you everything you need to know about this Government that they believe we should prioritise oil and gas companies making huge windfall profits that they say are ‘struggling’, rather than the British people who face the true struggle to pay their energy bills.

“Labour will stand up for the millions of families across the country, with a package that won’t just help the average household with around £200 off bills, but also targeted and focused support for those who need it most – including low earners, pensioners and the squeezed middle – with up to £600 in total off their bills.”

No 10 said on Monday that ministers recognised there were “increased costs on things like both food and fuel” globally.

But Labour rejected that the issues were caused solely by global factors, instead pointing to what they called a decade of failure on energy by the Conservatives.

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