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Household Energy Bills: VAT
11 January 2022
Lead MP
Rachel Reeves
Debate Type
General Debate
Tags
TaxationBrexitEnergy
Other Contributors: 38
At a Glance
Rachel Reeves raised concerns about household energy bills: vat in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
Reeves argues that the Government should cut the rate of VAT for household energy bills to mitigate the cost-of-living crisis, particularly benefiting low-income families and pensioners. She emphasises that a VAT reduction would provide immediate relief and calls on the Government to act now given its power to implement such measures post-Brexit.
Intervened, asking Rachel Reeves if her proposed measure would be possible if the UK were still in the EU.
Harriett Baldwin
Con
West Worcestershire
Argued that cutting VAT on household energy bills could give a disproportionate tax break to those with larger houses and more resources.
Supported the proposal, questioning why assisting wealthier individuals is seen as problematic when the Conservatives are giving substantial levelling-up funds for home improvements.
Jim Shannon
DUP
Strangford
Welcomed the proposals but suggested that removing green taxes might be necessary to lower prices during the current fuel crisis.
Shared a constituent's story of increased energy costs and struggles with basic living expenses, highlighting the urgent need for relief measures.
Disagreed, arguing that Labour's motion is politically motivated rather than genuinely aimed at reducing consumer costs. She accused Labour of attempting to undermine the Government by controlling debate proceedings.
Challenged Reeves' claims about levelling up and highlighted local government projects in Stoke-on-Trent funded by Conservative initiatives, suggesting that Labour lacks credibility on this issue.
Simon Clarke
Con
Mid Dorset and North Poole
The Minister recognises the pressure people are facing in their household finances, especially on energy bills. He outlines that higher inflation is primarily due to global factors such as the pandemic and a spike in energy costs. The Government have taken steps like introducing the £500 million household support fund and increasing winter fuel payments and cold weather payments. He also mentions the record of investment in renewable energy compared to previous Labour governments.
Bristol East
He criticises the Government's measures, stating that they will be clobbering people with a £1,405 bill due to council tax rises and other taxes. He questions how the Chief Secretary can say they are helping when this is happening.
Alan Brown
SNP
Central Ayrshire
Mr. Brown criticised the UK Government for their failure to address the current cost-of-living crisis and called out broken promises about lower energy bills post Brexit. He warned of a looming real crisis if no action is taken, highlighting that National Energy Action estimates 4.5 million fuel-poor households in the UK which could rise to 6 million. He urged Ofgem and the Government to address how the cap operates to provide more protection for vulnerable users. Brown supported calls for Government loans to help energy companies smooth transitional costs over a period of 10 years and further direct intervention to mitigate any fuel rises, endorsing the VAT holiday proposed by Labour. However, he expressed concerns about some aspects of Labour's £6.6 billion package and suggested releasing additional windfall revenue received by the Treasury. He also questioned Labour's support for nuclear power despite its high costs.
Gary Sambrook
Con
Birmingham, Northfield
The debate is not about energy bills or VAT but rather a cynical move to control the Order Paper. The Government has been taking practical action such as providing financial support through the household support fund and increasing the national living wage by 6.5%. This supports millions of people, including those in Birmingham.
Tooting
Many people are facing hardship due to increased costs of living. A single mother is struggling with a high upfront payment for gas, risking disconnection. The Government's energy policy has failed, leading to more injuries from inadequate heating methods. Labour proposes removing VAT on domestic energy bills and expanding the warm homes discount.
We need a united commitment to decarbonisation and energy transition. Tax cuts or rises rarely remain temporary; VAT is one of the most sustainable forms of taxation for raising revenue. Investment in renewable energy and insulation is crucial for reducing long-term energy bills.
Sammy Wilson
DUP
East Antrim
While supporting net zero targets, the hon. Member should recognise that high energy bills are partly due to green levies which have reached 26% of consumer payments on their energy bills.
Critiques the motion as misleading, focusing instead on rural cost of living issues like higher fuel poverty rates due to antiquated heating systems and poor insulation. Supports Government's targeted interventions such as BEIS's £450 million for upgrades and winter fuel payments increase.
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
Briefly supports the motion.
Lee Anderson
Reform
Ashfield
Supports VAT removal from energy bills but criticises Labour for playing politics with people's lives. Acknowledges Government efforts in levelling up Ashfield despite historical neglect, highlighting £70 million investment and two new schools.
Tommy Sheppard
SNP
Edinburgh East
The past two years have been extremely difficult for millions of people in Britain, but wealth disparity has worsened. The number of millionaires and billionaires increased by 10% and 15%, respectively, with a combined net worth of £600 billion. Despite this, the Government is cutting household income for the poorest families and increasing taxes on average earners while keeping tax levels low for the wealthiest. The proposal to cut VAT on energy bills should be supported as it would ease the financial burden for struggling families.
Jack Brereton
Con
Stoke-on-Trent South
The Labour party's proposal is an underhand attempt to subvert democracy. The challenges of cost-of-living are not unique to Britain but a global issue due to the aftermath of the pandemic and actions by adversaries such as Russia, which have increased energy costs globally. Stoke-on-Trent South has seen wages rise significantly over the past decade, owing to policies that include increasing the national living wage and cutting taxes for low-income families. The only way to address cost-of-living pressures is through measures like kickstart and the lifetime skills guarantee.
Kim Leadbeater
Lab
Batley and Spen
Many people in my constituency are experiencing genuine anxiety and hardship due to the impending cost-of-living crisis. There are families struggling to pay their bills despite both parents working full-time jobs, with some relying on food banks for survival. The Government's policies have exacerbated these issues. It is essential that we support those most affected by providing heating payments and other financial assistance.
Arfon
Williams argues that the increase in energy prices is a critical issue, especially for lower-income families who are already struggling. He supports the Labour proposal to cut VAT on energy bills but calls for more comprehensive measures such as restoring the £20 uplift to universal credit and extending cold weather payments to all poorer working-age households.
Craig Mackinlay
Con
Hendon
Mackinlay criticises the Labour party's approach, stating that while he agrees with cutting VAT on energy bills, it is just a short-term measure. He argues for a broader debate on long-term energy policy failures and highlights specific policies implemented under previous Labour governments that have contributed to current issues.
Naseem Shah
Lab
Bradford West
Shah criticises the Government's handling of economic challenges, highlighting poor planning and a lack of support for workers. He emphasises the impact of rising energy bills on lower-income families and calls for urgent action to protect them from further financial strain.
Ben Bradley
Con
Ardsley
Cutting VAT on energy bills is under active consideration but the government needs to ensure that taxpayers' money is spent effectively and where it is most needed. Green levies are a short-term problem, not a long-term solution. The Government has already implemented numerous support measures for those struggling with energy costs.
Brighton Kemptown
The cost of living could have been controlled if the government had made better choices on energy, such as allowing onshore wind farms and supporting solar feed-in tariffs. The proposal to slash VAT is a short-term fix but also includes long-term investments in green energy.
Danny Kruger
Reform
East Wiltshire
More needs to be done to address cost of living pressures, including the possibility of cutting VAT on household fuel. A carbon fee and dividend could be considered to support low-income families while reducing carbon emissions.
Christine Jardine
Lib Dem
Edinburgh West
She criticised the Government for not addressing the cost-of-living crisis adequately and highlighted that people are concerned about heating their homes, feeding children, and staying warm. She proposed doubling the warm home discount and winter allowance and supported Labour's motion to address these issues.
He acknowledged the severity of the cost-of-living crisis but was concerned that cutting VAT would not be targeted enough. He advocated for more specific measures such as supporting pensioners and low-income individuals through winter fuel payments and warm home discounts, while also suggesting regulatory changes to address energy company practices.
He criticised the Chancellor's absence from debates on the cost-of-living crisis and called for a wide range of measures including one-off payments to low-income households, increasing the warm home discount, reinstating universal credit cuts, and addressing pensioner poverty by restoring the pensions triple lock. He also proposed reducing VAT and environmental levies on energy bills.
Ruth Jones
Lab
Newport West and Islwyn
She expressed concern over rising living costs for residents in Newport West, advocating for removing VAT from domestic energy bills for a year, expanding the warm home discount, smoothing supplier failure costs, and establishing a contingency fund for energy-intensive businesses. She also highlighted the expected increase in dual fuel bills.
Mohammad Yasin
Lab
Bedford
January is the toughest month for most people, but this year, people’s financial worries are at a whole new level. In December, emails started coming in from my constituents telling me that they are having to choose between heating and eating... The need to reform our broken energy and regulatory system has never been clearer. We must unleash the vast potential of British renewable and nuclear energy and we must insulate our homes.
Mary Foy
Lab
City of Durham
It is undeniable that the cost of living is spiralling out of control and the situation is being made bleaker by sky rocketing energy prices... MPs have a simple choice today: we can vote to ease the squeeze on families across Britain or we can leave many to choose between heating and eating. I know which I will be voting for.
Salford
Annual fuel bills are expected to rise not by a little bit but by a whopping 50% when the current energy price cap is raised in April... In fact, EDF supplies the UK, yet the Government do not think we are good enough to have our own public energy company.
Matt Western
Lab
Warwick and Leamington
Working families everywhere are feeling the pinch. Energy prices are rocketing, housing is increasingly unaffordable and inefficient, food prices are rising and there is a global gas price crisis... I understand how hard this winter is going to be for my constituents, and I believe that the Government have to act urgently to address that.
Mick Whitley
Lab
Birkenhead
The UK is facing the worst cost-of-living crisis in recent memory, with rising inflation, soaring food costs and an energy crisis that has rapidly got out of control. This Government’s decade-long failure to reduce the country’s foreign energy dependence has left us especially exposed.
Claudia Webbe
Lab
Leicester East
The Tory Government is presiding over a cost-of-living crisis that will hit the most vulnerable hardest. UK household incomes could be down £1,000 this year as rising prices combine with welfare benefit cuts and rising taxes. The Government’s policies will push more people into destitution, while leaving the fortunes of their rich mates untouched.
Grahame Morris
Lab
Easington
This issue shows the disconnect at the heart of Government and the realities on the ground for working families. The Conservative party will be remembered as the party of child poverty, food poverty, fuel poverty and homelessness due to political choices over the past decade that have not put resources behind addressing these critical issues.
The Government addresses the volatility of wholesale gas prices with a long-term strategy focused on replacing fossil fuels with reliable alternatives such as renewables and nuclear energy. They have made significant progress in renewable energy since 2010, increasing its contribution to 43% of electricity by 2020 from just 7% when Ed Miliband was Secretary of State for Energy and Climate Change. The Government aims to quadruple offshore wind capacity over the next decade and supports nuclear power through the Nuclear Energy (Financing) Bill.
Government Response
The Government have introduced measures such as the £500 million household support fund, increasing winter fuel payments, cold weather payments, and consulting on expanding the warm home discount. He emphasises that their interventions are targeted to help those struggling the most.
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Assessment & feedback
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