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Call for VAT cut on energy bills

The Energy and Utilities Alliance (EUA) has called for a VAT cut on spiralling energy bills this winter.

Chief executive of the EUA Mike Foster

Chief executive of the EUA Mike Foster said: “When global shocks hit home, it is the duty of a government to mitigate the impact. Energy bills have leapt £150 already this year for those on the Price Cap to £1,277 and all the experts agree, they will jump again next spring. When the regulator does not dismiss speculation of an average household energy bill of £2,000, it is time for the Government to act.

“Scrapping VAT on energy, as a temporary measure, will immediately reduce the bills of hard-pressed households. For those on the price cap, it will save them £64 a year at the current level. If bills do rise to £2,000, that VAT scrap will be worth £100. All households will get some relief this way. It isn’t a perfect solution but a good one.

“This move will also allow the Prime Minister to make good his promise made during the Brexit Referendum, when he and Michael Gove promised to scrap VAT on energy to give household cheaper energy bills as part of the Brexit dividend.

“EUA has polled the public on this. By a huge margin, 76% in favour compared to 11% against, voters would support a reduction in VAT on their energy bills.

“It is time to take action. Consumers are genuinely worried about paying so much more to keep warm. The choice of ‘heating or eating’ is one that no one should have to make.”

12 October 2021


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