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Labour piles pressure on Boris Johnson and Rishi Sunak to axe VAT on domestic fuel bills

Labour piles pressure on Boris Johnson and Rishi Sunak to axe VAT on domestic fuel bills as Rachel Reeves demands they ‘get a grip’ on cost of living crisis hitting families

  • Rachel Reeves called on Boris Johnson and Rishi Sunak to ‘get a grip’ on prices
  • Shadow Chancellor wants VAT axed for six months to help through the winter
  • Party analysis found poorest 10% pay average £756pp for electricity, gas


Labour piled more pressure on ministers to cut fuel bills for hard-pressed Brits today by cutting VAT.

Shadow Chancellor Rachel Reeves called on Boris Johnson and Rishi Sunak to ‘get a grip’ on the cost of living crisis by axing the levy for six months through winter.

Analysis by the party revealed those living in poverty are paying more on average for their gas and electricity than those who live more comfortably.

It found the poorest 10 per cent of households pay on average £756 a year per person for electricity, gas and other fuels.

Labour said this was an extra 50 per cent above what the richest households pay, at £504 per person on average, and more than the national average at £530.

Ms Reeves said:  ‘We must get a grip on this cost of living crisis. That’s why Labour would cut VAT immediately on domestic energy bills for the next six months to help people get through this winter.’

Shadow Chancellor Rachel Reeves called on BVoris Johnson and Rishi Sunak to ‘get a grip’ on the cost of living crisis by axing the levy for six months through winter.

Analysis by the party revealed those living in poverty are paying more on average for their gas and electricity than those who live more comfortably.

Analysis by the party revealed those living in poverty are paying more on average for their gas and electricity than those who live more comfortably.

Cutting VAT on domestic energy bills from 5% to zero could come into place as soon as November 1, Labour said, and should be in place for six months and automatically deducted from bills to cover high energy costs expected this winter.

And the party said the cut could be funded by higher than expected VAT receipts accrued since the start of the year.

Reports have suggested that Mr Sunak was considering a cut, backed by some Tory MPs.

Robert Halfon, Conservative chair of the House of Commons education committee, previously told the Financial Times that cutting VAT would “show we are doing something to help consumers”.

And he said it would also honour a Brexit pledge as EU rules had not allowed VAT on energy bills to be lower than 5 per cent.

The FT also said the move was supported by Conservative grandee Sir Christopher Chope.

But the newspaper reported no decisions had been taken.

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