Household Energy Bills: VAT

Mick Whitley Excerpts

Tuesday 11th January 2022 Commons Chamber

[Mick Whitley (Birkenhead) (Lab)]

Our country faces the worst cost-of-living crisis in recent memory as families grapple with rising inflation, soaring food costs and an energy crisis that has rapidly got out of control. This Government’s decade-long failure to reduce the country’s foreign energy dependence has left us especially exposed to the devastating impact of wholesale gas prices. In the space of just a few short months, no fewer than 27 energy providers have collapsed, and ordinary people are being forced to reckon with the real possibility that their gas and electricity bills could rise by as much as 45% to 50% by spring 2022, according to the trade association Energy UK. No one has been spared the fallout from this spiralling crisis, but it is the poorest communities, such as those in my constituency of Birkenhead, that are being hit hardest of all.

Last autumn, I warned the House that thousands more people across Wirral risked being pushed into poverty as a result of changes to the energy price cap and the cut to universal credit. At that time, those concerns were dismissed out of hand by complacent Ministers, but now National Energy Action is warning that 2 million more people could be plunged into fuel poverty as a result of rising costs, bringing the overall total to the highest level since records began.

At this challenging time, the country has the great misfortune to be governed by a party more interested in its own internal power struggles and the increasingly untenable position of the Prime Minister than in giving British households the support they so desperately need. Ministers rushed to take to the airwaves this weekend to condemn Labour’s plans to bring energy bills down, but it is clear for all to see that they have no realistic plan of their own. Some Conservative Members have seen this crisis as an opportunity to take aim at the net zero agenda, calling for the environmental levy on energy bills to be scrapped and for the resumption of fracking and the expansion of drilling in the North sea. That is not prompted by the slightest concern for people struggling to get by. Instead, those Members are motivated by a deep-seated and ideological objection to climate statute.

Let me be clear: we cannot solve the problems of today by trading away our grandchildren’s future. Hard-won progress on the climate must not be sacrificed to make up for the Government’s monumental failings. In truth, only my party has put forward credible proposals to meet the immediate needs of British households and industry. I commend my hon. Friends on the Front Bench for the proposal that they have brought before the House today, including the removal of VAT on domestic energy bills, a windfall tax on North sea gas and oil, and a £600 contingency fund to support energy-intensive industries such as British Steel.

The Minister must put partisanship to one side and engage constructively with those proposals in the national interest. But I believe that he must go further, too. The current crisis has exposed enormous vulnerabilities inherent in our fragmented and privatised energy system. Wholesale reform of the sector is badly needed. By bringing energy into public hands, we can—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Sorry. Claudia Webbe.