Wednesday, January 19, 2022

Application to lower VAT on energy bills rejected in the House of Commons

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A Labor motion to force a cut in VAT on energy bills amid concerns over an impending cost of living crisis was rejected by Tory MPs in the House of Commons.

MPs voted 319-229 – a 90 majority – against the proposal, with Anne Marie Morris being the only Conservative MP to rebel and support the measure.

If the motion had been approved in the House of Commons, it would have forced government ministers to guarantee time for legislation to lower VAT on energy bills ahead of an expected hike this spring.

Labor had previously announced that it would tax North Sea oil and gas companies to pay for the VAT cut, which the party said could “save households £ 200 off their bills, with a total of up to £ 600 for those who need them most”.

After the motion was denied, Labor leader Sir Keir Starmer said the Conservative MP had “an opportunity to put families, retirees and troubled businesses first on energy bills with a VAT cut.”

“You voted against,” he added. “Instead of offering security to those who need it most, the Conservatives are failing them.”

The shadow chancellor Rachel Reeves, who accused Chancellor Rishi Sunak of “hiding”, said in the House of Commons that the companies had “profited massively from skyrocketing prices”.

Boris Johnson, whose government is struggling to resolve concerns about the cost of living, previously rejected the option to cut VAT, calling it a “blunt tool” – despite demonstrating the option to abolish the “unfair and harmful tax” “in Brexit -Referendum.

However, earlier this week he admitted that more needs to be done to protect families, especially those with low incomes, from an impending increase in energy bills, with an extension of the winter home discount under consideration.

The surge in consumer bills will also coincide with an increase in national insurance, which is destroying the Manifesto, creating great cost of living concerns even in conservative circles.

Following on from the Prime Minister’s comments in the House of Commons on Tuesday, Treasury Secretary Simon Clarke said, “Nobody in this administration is delusional about the challenges families face with their household finances and we will of course continue to examine carefully all of the options available.”

He told MPs: “The government recognizes the pressures people are facing on their household finances, including their energy bills, and we have already taken steps to ease those pressures where and when we can and of course we will check other things we can.

“The reality is that the higher inflation we’ve seen is primarily due to global factors, in large part due to the impact of the pandemic and a rise in energy costs around the world.”

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