Household Energy Bills: VAT

Baroness Laing of Elderslie Excerpts

Tuesday 11th January 2022 Commons Chamber

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

I am very grateful to the hon. Lady for giving way. She talks about levelling up, but it is Stoke-on-Trent’s Conservative-led council and this Conservative Government that have delivered £56 million from the levelling-up fund, £29 million from the transforming cities fund, and 550 brand-new Home Office jobs. The only Stoke that the hon. Lady knows is Stoke Newington, not Stoke-on-Trent.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Let us just take the temperature down a little. I did not want to interrupt the hon. Lady when she was in full flow, but she must not call the hon. Gentleman “you”, because that might confuse him with me, and we would not want that.

[Rachel Reeves]

Literally no one would want that, Madam Deputy Speaker. I look forward to seeing the leaflets in Stoke-on-Trent at the next election and seeing how the hon. Member will justify not voting to keep VAT down on gas and electricity bills for his constituents.

In April we will see a national insurance hike and a council tax hike, and gas and electricity bills are going up too. Together we can today force the action that would reduce those bills for all our constituents—for people across our country—and ease the burden of a cost-of-living crisis that is spiralling out of control.

The Prime Minister seems to think that a cost-of-living crisis is when he cannot find a friend to pay for the luxury refurbishment of his flat, but for working people in our country it means struggling to pay gas and electricity bills. When it comes to the energy crisis, as with so much else, the Conservatives have been asleep at the wheel, and now it is ordinary people who are picking up the bill for their failures.

There is a clear choice with today’s vote: MPs can either vote for this motion, allowing us to bring forward legislation to cut VAT on household energy bills from 5% to 0% for one year, or they can vote against it and block bringing in the practical, automatic and immediate support that would give security to all our constituents. People will soon be hit by yet more rising bills, rising prices and rising taxes. These are the everyday worries that politics must address. People want a Chancellor who understands this and has a practical plan to help. The Chancellor might not care about turning up the heating, but the very least he could do is turn up for this debate and take the action needed to help our constituents.

[Several hon. Members rose—]

[Madam Deputy Speaker]

I inform the House that Mr Speaker has not selected the amendment in the name of the leader of the Liberal Democrats. A great many Members wish to take part in the debate, as is obvious from the number now on their feet, and there will therefore be an immediate time limit of four minutes on Back-Bench speeches, after we have heard from the Minister.

--- Later in debate ---

[Madam Deputy Speaker (Dame Eleanor Laing)]

We now have a time limit of four minutes on Back-Bench speeches, beginning with Gary Sambrook.

--- Later in debate ---

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

I rise to speak briefly in support of the motion.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I beg the hon. Gentleman’s pardon, but I have to reduce the time limit to three minutes.

[Gerald Jones]

Thank you, Madam Deputy Speaker.

Families in Merthyr Tydfil and Rhymney and across the country face a bleak start to the new year. Rising energy costs are especially concerning at the coldest time of year. The cost-of-living crisis is growing. Shopping baskets were £15 more expensive this Christmas than last Christmas because of inflation, and the price of petrol was 24% higher. Families face real pressures on their household incomes this winter, yet so far the Government have not stepped up to the challenge and offered anywhere near adequate support.

Next month, a new price cap is likely to be announced to take effect from April 2022, and there is some alarming speculation that bills could rise by as much as 46%. Undoubtedly, some will point to the rise in energy bills being partly due to the short-term increase in the global gas price, but let us be clear: the reality is that a decade of Conservative government has left us exposed to the market. Do the Government recognise that their failure on regulation and gas storage, the delay in new nuclear and renewables, and the failure to insulate homes properly have led to working people paying the price for the Government’s incompetence?

Labour’s plan, which the motion outlines, will go some way to support families up and down the country who face a cost-of-living crisis here and now. We know that oil and gas producers in the North sea have posted huge profits during the pandemic. A windfall tax to help cut VAT on home energy bills and ease the burden on working families is appropriate at this most difficult time for families across the country.

Cutting VAT on energy would save most households around £200 on their bills at a time when the poorest need support. We also know that the Prime Minister, the Levelling Up Secretary and the Home Secretary backed cutting VAT on fuel in the past. Therefore, the Government could support the motion. Why are they so far refusing to do so? As I said, Labour’s plan would save most households £200 while targeting support at low earners, and pensioners would save £600. The plan tries to ensure that people do not have to choose between eating and heating.

The Welsh Labour Government have already announced a £38 million winter fuel support scheme that directly supports families to cover their energy costs and keep their homes warm this winter. That demonstrates the Welsh Government’s willingness to offer support to those most in need. The Welsh Government never shied away from trying to support families through the crisis. We now need the UK Government, with all their financial clout, to step up to the plate and deliver for those who need it most at this most difficult time. I urge all Members, particularly those on the Conservative Benches, to do the decent thing and support the Opposition motion.