Household Energy Bills: VAT

Lord Mackinlay of Richborough Excerpts

Tuesday 11th January 2022 Commons Chamber

[Alan Brown]

I agree wholeheartedly. It is interesting that the Government are now revisiting the Rough gas-storage scheme. Yes, there has been a global impact on wholesale prices and prices would have risen, but it is clear that storage facilities would help to provide a buffer for the UK in times of need.



If we look at the history of North sea exploration, Scotland has paid £375 billion of oil and gas revenues to the Exchequer, which has been squandered by successive UK Governments. For all these years, the SNP has called for an oil and gas fund to be set up, which could have been utilised in this time of need. Norway did not start its oil fund until 1990, yet it is already the largest sovereign wealth fund in the world. It grew by £90 billion during 2020—one of the covid years—and now has assets worth well over $1 trillion. That is the kind of long-term strategic planning that has been missing in the UK but that would create a buffer when required.

[Craig Mackinlay (South Thanet) (Con)]

I may have missed it, but an element of clarity may be needed in the SNP’s position. The hon. Gentleman said that the SNP will support the reduction in VAT. Is it right that the SNP’s ambition is to be an independent country in the EU, under which his ambition to have 0% VAT on fuel would be completely scuppered and dictated to by other people in Brussels? Is that the SNP’s position?

[Alan Brown]

I will make it clear for the hon. Gentleman: yes, our ambition is to be an independent country and yes, we want to join the EU. The vote today is about a temporary VAT holiday. The argument could be made that that could not happen under the EU, but energy policy would be reserved to Scotland so we would have much fairer policies. We would be able to do more and make other decisions, which would not rely on us having to back a 5% VAT holiday in Westminster. We would be able to do a lot more as an independent country, even in the EU.

--- Later in debate ---

[Craig Mackinlay (South Thanet) (Con)]

Sadly, this Opposition day debate is, I believe, an opportunity lost for the Opposition. Energy prices and how we can help the lower-paid—and all of us, frankly—to weather the storm of high energy prices is a great topic to be debating. We could have had a debate this afternoon about why that has happened, rather than just papering over the crack of the problem that we are in, which is frankly all we can do at the moment.

Of course, VAT is one measure that is in our gift to take, now that we are outside the European Union. It is quite funny. Labour spent weeks, months and even years trying to frustrate the Brexit referendum. Mr Deputy Speaker, you were here at the time of what I would call the Brexit wars. We remember the scars of the Letwin amendment, the Grieve Bill and the Benn-Burt Bill, when similar activity was indulged in this House and people tried to take over the Order Paper and get their way, in opposition to the elected Government of the day.

I hate to break it to the Opposition, but the Government of the day are on these Benches, and they have a pretty big majority. They control the agenda, and I do not think we want to go through the shenanigans of the past. However, if Labour had left today’s motion to about the first line, I think I would be speaking greatly in support of it. The first line says:

“That this House calls on the Government to cut the rate of VAT for household energy bills”.

I agree with that absolutely and entirely, but we need to go further in addressing the papering over the cracks during 20 years of failed energy policy. It is not just our energy policy that has failed—I will admit that—but the Opposition energy policy that failed when they were in government.

I am absolutely delighted that the right hon. Member for Doncaster North (Edward Miliband) is with us today, because I think I can put at his doorstep many of the problems that we face, through the climate change levy, the renewables obligation and the Climate Change Act 2008, which added all those extra green and renewable levies on to our energy bills at a time when we really do not want or need them.

I will quote what the right hon. Gentleman said in 2008, justifying rising costs to business in energy prices. He said that it was a good price to pay and that we should sacrifice economic growth to cut emissions. That is exactly what we are doing now. We need cheap energy. We need a debate on our energy supply. Is it at all sensible that Britain and the European Union spend billions on gas with Putin’s Russia, so that he can have more money to create weapons of offence on the borders of Europe and the UK? It is a mad policy. We need a new policy, but today is not the time for supporting the Opposition.