Household Energy Bills: VAT

Mohammad Yasin Excerpts

Tuesday 11th January 2022 Commons Chamber

[Mohammad Yasin (Bedford) (Lab)]

January is the toughest month for most people, but this year, people’s financial worries are at a whole new level. In December, emails started coming in from my constituents telling me that they are having to choose between heating and eating.

It is not just pensioners, those unable to work or workers on low incomes who are worried about spiralling food, fuel and energy costs, but the majority of people—many millions of workers—who are not entitled to Government help. They include the self-employed hammered by IR35 and those excluded from help during the pandemic. Most of them can normally withstand the odd unexpected bill, but they cannot now budget for the spiralling costs, income tax hikes, council tax rises and the cost of inflation heading towards 7%, alongside real-terms pay cuts and stagnant growth.

In 2016, the Prime Minister and the Secretary of State for Levelling Up, Housing and Communities promised us, as they outlined their plans to cut VAT on household energy payments, that gas bills would be lower for everyone and wages would be boosted if voters backed Brexit. A year after Brexit, the opposite is true. Ministers should make good on their promise to ease the burden on families by cutting VAT on energy bills, but instead of action, all we are left with is a tissue of false promises.

The Government cannot keep hiding behind the cost of the pandemic as an excuse to do nothing, when other Governments have faced the same difficulties. The Labour party has a plan that I hope the Government will listen to today. UK households are already under pressure from inflation and face a sharp rise in costs in April when the cap on energy prices will be raised. The poorest 10% of households will see their spending on energy increase from 8.5% of their total budget to 12% according to the Resolution Foundation. Again, the people who can least afford it are footing the bill while the millionaires and billionaires are untouched.

We must act now to prevent the devastating consequences of sky high bills that many people simply cannot afford. The need to reform our broken energy and regulatory system has never been clearer. We must unleash the vast potential of British renewable and nuclear energy and we must insulate our homes. To deliver the green transition, we need energy security and affordable bills.