On Tuesday, Labour forced a binding vote on a VAT cut to home energy bills to help protect families from astronomical price rises. The Tories voted this down, once again treating the taxpayer like a limitless cash cow to pay for their mistakes.

The Government’s refusal to cut VAT is a betrayal of the British public. Hiding behind the guise of the global energy crisis, they refuse to acknowledge that ten years of failed Tory energy policy has left us uniquely exposed to bear the full brunt of this perfect storm. Working families are feeling the pinch of rising prices, as inflation roams out of control.

In February, Ofgem, the official energy market regulator, plans to announce the new price cap for April 2022. Energy specialists have predicted that bills could rise by 46% (See here). For many, this will be simply unfeasible, with prices becoming unmanageable, some industries facing shutdowns, and many being unfairly plunged into financial turmoil at the hands of this Government.

Under the Tories, many were already facing fuel poverty long before the energy price rises of 2021. This crisis will not only exasperate this preventable problem for those already struggling, but will plunge many more into the grip of fuel poverty, leading to what the Resolution Foundation has described as a “living standards catastrophe” (see here).

Labour has a clear and workable plan: we propose a windfall tax to reduce the expected price rise, and the scrapping of VAT from home energy bills for a whole year. We would also target extra support to the squeezed middle, pensioners, and the lowest earners- saving them around £600 on bills- and expand the Warm Homes Discount to reach 9.3 million people. Despite growing pressure on the Prime Minister to implement this cut over the last few weeks, the Tories have once again chosen to abandon hardworking British people.

We put this proposal to the House of Commons on Tuesday and cynically, even Tory MPs who had said they want to help constituents with high bills and low incomes, failed to vote for it. See the results of this vote here.

Wage packets are shrinking in real terms, food prices are going up, and energy bills are set to soar. Many of the lowest paid households in the UK have poorly insulated housing and outdated boilers. A refusal to invest in our country’s future and a tendency to leave taking action until it is far too late have become characteristic of this Government. Working people deserve security, prosperity, and respect. It is all too clear that a Tory Government will not offer them this.

You can view Tuesday’s Opposition Day debate on a cut to VAT here.

Image of gas hob
Image of gas hob
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