politics

Labour to force binding vote by MPs on cutting VAT on energy bills


More than two dozen Tory MPs have pledged to scrap the tax off home energy bills in recent years – including Boris Johnson himself

Gas prices will soar and the average household bill is expected to rise by £700 a year
Gas prices will soar and the average household bill is expected to rise by £700 a year

Labour will challenge MPs to back plans to cut VAT on energy bills on Tuesday in a bid to pile more pressure on the Government to tackle the cost of living crisis.

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

More than two dozen Tory MPs have in recent years pledged to scrap the tax off home energy bills, including Boris Johnson himself.

The Government is expected to abstain on the vote with ministers privately admitting No 10 needs to get on the front foot over the issue.

Mr Johnson told reporters that he “understands” how people are struggling and he was “looking at what we can do” to help.

Labour wants to impose a windfall tax on North Sea oil and gas producers to fund measures to ease the cost of living squeeze, by reducing the average household energy bill by £200.






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Fossil fuel giants would be forced to contribute £1.2bn to help fund the proposals, through a year-long increase to their corporation tax of 10%.

The £6.6bn plan would also include removing VAT on domestic energy bills for a whole year, as well as expanding and increasing the warm homes discount to 9.3 million people.

The Government has so far resisted making moves on VAT with the PM dismissing it as a “blunt instrument” and Nadhim Zahawi saying oil and gas firms were “already struggling”.

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

They pointed to previous Tory pledges on VAT on energy bills by senior Tories including Mr Johnson, Michael Gove, Priti Patel and Esther McVey and 23 others.

Mr Johnson said in 2016 that leaving the EU would allow the UK to scrap VAT on energy bills, calling it “unfair”.

Shadow climate change minister Ed Miliband said: “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.

“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.”

No 10 has admitted that ministers recognise that people are facing “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.

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