Household Energy Bills: VAT

Debate between Jonathan Gullis and Rachel Reeves

Tuesday 11th January 2022 Commons Chamber

[Rachel Reeves]

On 9 June 2016, the right hon. Lady said:

“We are unable to get rid of VAT on fuel bills”

because the EU prevents us from doing so, despite fuel poverty, but nothing prevents the right hon. Lady from doing the right thing today by voting with us this evening.

There is a straight choice in today’s vote. A cut in VAT will make a real difference. If someone is on a lower income, they will feel the benefit of a VAT cut on their bills because they spend more of their household budget on energy. If someone is a pensioner, they spend twice as much on energy and will be hit even harder by the rising energy price cap. A cut on VAT for home energy bills would be an immediate relief for all. I can understand why the Government do not want to back Opposition policies, as the right hon. Lady has said. However, they would in fact only be honouring the Prime Minister’s own commitments, because the Prime Minister was once the greatest advocate of the VAT cut on home energy bills. In 2016, he said:

“When we Vote Leave, we will be able to scrap this unfair and damaging tax.”

Not once, but three times he has backed a VAT cut on energy bills. Many on the Government Benches have since joined that call. The Chief Secretary went halfway there just last year when he said that VAT on electricity should be cut. But now that the Prime Minister has a chance to actually do something, and he and his Chancellor say no. The problem is that you cannot pay bills on broken promises.

Speaking of the Chancellor, yet again he is in hiding. He was not here yesterday when we debated fiscal responsibility, and he is not here today to debate the cost of living. Maybe he has gone back to California. Had he been here, I would have asked him not just about his broken promises on VAT; I would also have asked, given that he lives and works next door to No. 10 Downing Street, how long he has known about the party on 20 May 2020, and what he has done or said about this disgraceful breach of lockdown rules. Was he at the party when it happened next door, or was he at his window taking the pictures? He might not want to answer my questions, but the country deserves to know whether he too has colluded in the 18-month cover-up.

In just 80 days’ time, on 1 April, working people will be hit—[Interruption.] Get on your feet. Tell your constituents why you will not be voting for a reduction in VAT this evening. Be my guest.

[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.