Household Energy Bills: VAT

Lee Anderson Excerpts

Tuesday 11th January 2022 Commons Chamber

[Lee Anderson (Ashfield) (Con)]

Now then, if Labour Members really wanted to help the poorest people in society, they would not come to this House with a motion to cut somebody’s bill by £61 a year. There were Labour MPs drinking in the Terrace bar last night who spent more than that on a round of drinks.

Do I want VAT removed from our energy bills? Of course I do. Everybody does. That is why last week I signed a letter to the Chancellor, asking him to cut the VAT on bills. I also want the removal of levies on domestic energy, which are nearly a quarter of an electricity bill. That sort of saving is a real saving, which would make a real difference to the people in Ashfield and Eastwood, but of course there is not much of an appetite for that in this place as we strive to be net zero in record time.

No one disagrees with what we are trying to do to save the planet, but a lot of us are sat here on over 80 grand a year—and some people have second jobs—and we are telling poor people that they must pay more to heat their homes. Frankly, when it comes to heating homes, people do not care where their gas or electricity comes from, in the same way as they do not care where their petrol or diesel comes from when they go to fill up their cars. All people want is to be able to afford their bills—that is all.

Labour Members are trying to play politics with people’s lives so that they can get a cheap social media clip saying, “The nasty Tories are voting against a cut in VAT.” They rely on the great British public not knowing how the process works in this place. It is a pitiful way of conducting themselves.

Let us be honest, this is not a vote to help poorer people pay their bills. It is a vote to take over the Order Paper so the Opposition can return us to the disastrous days of a few years ago that almost cancelled Brexit. There is no doubt that people are struggling and the cost of living is increasing with the increase in fuel prices, but who is to blame for that increase? We cannot just blame the pandemic, as we are all to blame. Successive Governments have never taken this seriously. We closed all our pits and we do not produce gas like we used to. Both Conservative and Labour Governments, let us be honest, have ignored this for years.

I see Labour Members shaking their heads, but they are not really interested in helping people in places like Ashfield, which has been ignored for decades. Ashfield has had no investment at all, but so far under this Government we have had £70 million, two new schools coming and hopefully a new railway line. We have millions of pounds coming to Ashfield, and what is Labour’s answer to levelling up Ashfield? A saving of £1 a week on energy bills. That is absolutely disgraceful, and Labour Members should hang their head in shame.

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[Jack Brereton (Stoke-on-Trent South) (Con)]

I struggle to believe what we are seeing from the Labour party today: a party that has repeatedly opposed Brexit and did everything it could to try to stop us leaving the EU is now proposing something that would have been impossible had we remained in the EU. We see right through these underhand attempts by the Labour party to subvert democracy and take over control of Government time. The reality is that, yes, our constituents across the country are feeling the pressures of inflation and increased energy costs, but this is not just a UK issue; this is an issue faced by the global economy as we emerge from the pandemic, as well as a result of the actions of adversaries, including Putin’s Russia, which are ramping up global energy costs in an attempt to prop up their own domestic failings

The challenges of the cost of living faced by my constituents in Stoke-on-Trent South are nothing new. For decades the neglect of our city by the Labour party has seen wage levels remain far below the national average. It is only now that we are starting to see things change, with wage levels increasing with a resurgent Stoke-on-Trent economy.

[Lee Anderson]

My hon. Friend is talking about the deprivation and years of neglect in his own patch in Stoke; does he agree that that pattern was repeated all over the country in the north and the midlands and that we are finally putting it right?

[Jack Brereton]

I absolutely agree. We are seeing that right across the north and the midlands, in towns and cities that were neglected for decades by the Labour party, including Stoke-on-Trent, and which are now growing faster than most other UK cities. According to Office for National Statistics figures, in the last decade the average weekly pay in Stoke-on-Trent has risen by more than £125 a week. That is due to the policies of the Conservative Government: increasing the national living wage, cutting tax for the lowest income families and freezing fuel duty repeatedly. That is the only way we are going to get out of this cost of living and energy price crisis: continuing to see people’s wages rise and ensuring people take home more.

Government can put off the inevitable cost increases, but for how long? What is being proposed today would only delay them, as this is a global trend of increased energy costs that shows little sign of reversing. This measure would also not focus enough on those who need help the most, and given that cost increases are not just being seen in electricity and gas prices we must take broader action to ensure that people are able to earn more and are better able to cope with the pressures of increased costs of living. The only way this is achieved is through helping people to increase skills levels and take on better job opportunities, and getting more people back into meaningful work through schemes such as kickstart and the lifetime skills guarantee that this Government are focused on delivering.

After decades of decline under Labour, Stoke-on-Trent is a city with renewed confidence, and not only have we seen wages go up, but we have seen record numbers of people in work. The number of jobs available in the city over the last decade has increased by around 17,000 and the number of workless households has almost halved, such was the legacy of a Labour party that condemned people to a lifetime of worklessness and benefits, with hopes and dreams lost. We as Conservatives are determined to reverse that by delivering on the Government’s levelling-up agenda and rebalancing opportunities for our whole country, which has recently seen us secure £56 million for Stoke-on-Trent from the levelling-up fund. It is through these actions that we will see people rising out of poverty and address the cost of living challenges we face.

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[Ben Bradley (Mansfield) (Con)]

The debate on the cost of living and energy bills is obviously very important and pertinent, and I hope and trust that it is going on in the corridors of this place all the time, because it is a matter of huge importance to my constituents.

It is clear that cutting VAT on energy bills is one option to consider. The last I understood, I think it was the Prime Minister who said last week that it was under active consideration. There is obviously a decision to make on how targeted and effective that support might be. Clearly, such a measure would reduce energy costs, but it would mean spending taxpayers’ money on cutting energy bills for a lot of people who are not struggling and do not need that support. Indeed, it would be a tax cut for all of us in this room, despite the salaries that we are paid.

We have a duty in this place to ensure that taxpayers’ money is spent in an effective way and where it is most needed, so it is understandable and right that the Government will want to consider a whole range of measures to ensure that they come to the most effective conclusion both in targeting that support and for cost-effectiveness for the taxpayer. There are other options, including some of the green levies on bills, which have been discussed already, that make up a higher proportion of many energy bills than VAT. While it is true that the long-term answer may be investment in sustainable energy production, in the short term it makes bills more expensive. Reports from the TaxPayers Alliance in recent weeks suggest that the burden of those green taxes is likely to rise by as much as 40% in the coming years, and that will have an impact on the cost of living.

[Lee Anderson]

My hon. Friend is most generous with his time. We talk about the green levies, which affect poorer people the most in society, and we talk about cutting VAT, which will benefit the most wealthy in society, such as people in this place earning £80,000 a year. Does he think that that is unfair?

[Ben Bradley]

I thank my hon. Friend for that intervention, and he is absolutely right to say that many of our constituents who are ably described by Opposition Members as struggling to pay their bills would I am sure prioritise paying those bills and putting food on the table, rather than paying green levies on their energy bills for some future that they may or may not see. We know that that may be a short-term solution, but this is a short-term problem that we need to tackle now, and those levies are not helping people put food on the table tomorrow and to pay their bills tomorrow. We do need to think more about this than just to chuck an answer out there that may seem all right on social media, but actually relates to something in the region of about £1 or £1.10 a week for such constituents. It is certainly not the answer.

It is clear that there is an awful lot of work to be done, but there is already a lot of work being done to support people in need. We have had the list already from Conservative colleagues. There are warm home discounts, winter fuel payments, cold weather payments, winter support grants—it goes on and on—so let us not pretend that the Government are not acting on this. We know that these are tough times for a lot of people, but through covid, uncertainty, inflation and rising costs, the Government have acted, and they will act further and will help.

That debate is a legitimate and important one, but this is not that debate. The bit of the motion that may pass many of my constituents by—on the surface it is dry, internal administrative stuff, but it is actually really important to recognise this—is that it does not just ask the Government to tackle the cost of energy bills, but seeks to take us back to a time in the midst of Brexit negotiations when the Government lost the ability to control the business of the House through such a motion. The chaos that surrounded that whole scenario, with the damage that that process caused at the time to our Brexit negotiations and the illegitimacy of the premise that elected Governments should no longer decide what laws they introduce, was of absolutely no help to anybody. In fact, it made a mockery of this House and its procedures, and undermined both the democratic outcome of the referendum and the democratic outcome of the preceding general election, because it is of course Governments who are elected to make laws, not the Opposition.

This Opposition day debate does not just ask the Government to remove VAT; it asks the Government to give up control of the legislative agenda. It means we would just forget the measured consideration of which of the measures I described earlier might have the best impact and value, and instead allow the Opposition to set the agenda and timetable, and to legislate. That is not how Parliament works and it is not how democracy works. We have been there and tried that, and it was wrong at the time and it is wrong now. Sadly, the Opposition have turned what is otherwise a reasonable debate into something wholly unacceptable. If Labour Members’ answer to the rising cost of living is to knock a quid a week off energy bills and tell people it is a silver bullet, I think they need to go away and think harder, as the Government are doing, about how we genuinely support people in need.