Boris Johnson’s Government “recognises the pressure” that people are facing on their household finances including on their energy bills and will “continue to look closely at all the options that exist”, a Treasury minister has said.
His comments came as the Commons heard Labour would tax North Sea oil and gas companies to help reduce VAT on UK energy bills.
But Labour’s VAT cut motion was defeated by 319 votes to 229, majority 90, with Anne Marie Morris (Newton Abbot) the only Tory to rebel to support it.
Setting out Labour’s plans for a VAT cut to household energy bills during the party’s Opposition day debate, shadow chancellor Rachel Reeves had said: “Our plan would save households £200 off their bills, with up to £600 in total for those who need it most.
“We will pay for this with a windfall tax on North Sea oil and gas profits.
“These companies have profited massively because of exploding prices.
“So much so, that some in the industry have referred to soaring energy prices as a cash machine for producers and their shareholders.”
She also accused the Chancellor Rishi Sunak of being “in hiding”, adding: “Was the Chancellor at the party when it happened next door or was he at his window taking the pictures?”
Responding, Mr Clarke said: “No-one in this Government is under any illusion about the challenges families are facing with their household finances and we will of course continue to look closely at all the options that exist.
“The Business Secretary has been meeting with industry regularly and the Government is committed to do the best job we can to protect consumers.
“We have acted not just on energy bills, but in dozens of ways to support working families and our record in handling the economy during a pandemic indeed over the last decade of recovery speaks to our commitment to see right by the British people.”
He added: “The Government recognises the pressure that people are facing on their household finances including on their energy bills and we have taken steps already to ease those pressures where and when we can and we will of course continue to look at other things that we can do.”
“The reality is that the higher inflation that we’ve seen is primarily due to global factors relating to a large degree to the fallout from the pandemic and to a global spike in energy costs.”
Mr Clarke referred to the increase in the National Living Wage from April, adding: “It has been a goal of successive Conservative governments since 2010 to keep down the cost of living for working families.”
Conservative former Cabinet minister Andrea Leadsom branded Labour’s motion “cynical” adding “it has got nothing to do with trying to save costs for consumers and everything to do with Labour trying to make a point about taking control of the order paper”.
Conservative MP for Ashfield Lee Anderson accused Labour of “trying to play politics with people’s lives” for a “cheap social media clip”.
He said: “Do I want to see VAT removed from our energy bills?
“Of course I do, everybody does which is why I signed the letter last week to the Chancellor asking him to cut the VAT on bills but I also want to see the removal of levies on domestic energy which is nearly a quarter of an electricity bill.”
Conservative Ben Bradley (Mansfield) said there are other options to bring down energy costs, including removing green levies.
He said many constituents “who are struggling to pay the bills I’m sure would prioritise paying those bills and putting food on the table rather than paying green levies on their energy bills for some future outcome that they may or may not see”.
Lib Dem Christine Jardine (Edinburgh West) said: “We have inflation at record levels for the last ten years, we have a stealth tax introduced by the Government by freezing the tax threshold and we have a hike in National Insurance tax all of which is making a bad situation worse.”