Rachel Reeves must scrap VAT on energy bills in her autumn budget to ease the burden on Britons, cross-party MPs have warned.
Senior Tory MP Sir Iain Duncan Smith told how pensioners are struggling to heat their homes and “it is high time the Government drove these prices down”.
He said: “The Government has piled on extra charges and taxes on energy producers to such a degree that the energy costs of the United Kingdom are much higher than any other developed country in the world. This is leading to hardship for business but particularly now for those who need to heat their homes, such as pensioners and elderly people.
“It is high time the Government drove these prices down—and cutting VAT on domestic energy would be a good start.”
Reform UK’s deputy leader Richard Tice said his party would slash VAT on energy bills to ease the cost-of-living on Britons if they come to power.
He said: “This government’s obsession with its reckless net zero agenda is putting ideology before British jobs and affordable energy.
“A Reform government would scrap these damaging policies entirely, slashing VAT on energy bills to ease the burden on Britons, prioritising North Sea oil and gas production and launching a programme of reindustrialisation.”
Energy Secretary Ed Miliband and the Chancellor are under pressure to meet their pledge of slashing energy bills by £300 by 2030.
The Chancellor is understood to be looking at plans to eliminate the 5% VAT charge on electricity bills as a quick way to reduce bills for consumers and ease the cost of living pressures that have aided the rise of Reform UK.
Plaid Cymru’s Ben Lake MP, former Chair of the All-Party Fuel Poverty Committee, said: “I fully support calls to exempt domestic energy bills from VAT as it would offer much-needed relief at a time when the cost of living continues to place significant pressure on households across the country. Low-income households spend a greater proportion of their budgets on energy, so removing VAT would provide a significant boost.”
A Change.org petition to scrap the tax on energy bills has hit nearly 42,000 signatures.
MPs from the DUP, Labour and independent MPs have also backed the calls.
Asked about the idea last month, Mr Miliband said: “The whole of the government, including the chancellor, understand that we face an affordability crisis in this country. We face a cost-of-living crisis, a longstanding cost-of-living crisis, that we need to address as a government. We also face difficult fiscal circumstances … so obviously we’re looking at all of these issues.”
