VAT cut needed for spiralling energy bills, says industry body

 When global shocks hit home, it is the duty of a government to mitigate the impact. That’s according to Mike Foster CEO of the not-for-profit energy trade association the Energy & Utilities Alliance, who is calling for the Government to reduce VAT on energy bills this winter.

He says “Energy bills have leapt £150 already this year for those on the Price Cap to £1277 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 £2000, it is time for the Government to act.

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“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 £2000, 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 have 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.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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