Monday 10 January 2022 / 10:30 PM Cost of Living / Ed Miliband / Energy

Labour forces binding vote on VAT cut on home energy bills – as government refuse to back a windfall tax that would help to support families

Labour is today urging Conservative MPs to vote for a VAT cut to home energy bills over the next year, as the energy and cost of living crisis continues to escalate.

The binding motion, put forward by Labour in its opposition day debate, would guarantee Parliamentary time for a Bill on a VAT cut to home energy bills if passed, forcing MPs to actively vote for or against the legislation to implement this cut.

This follows the Government ruling out a windfall tax on North Sea Oil and Gas profits on Sunday. Education Secretary Nadhim Zahawi told LBC Radio that “oil and gas companies…are already struggling”, despite the fact that oil and gas companies are expected to report “near record” income in 2021/22.

The Labour Party is proposing that a windfall tax would help fund their package to reduce the expected energy price rise in April – saving most households around £200 or more.

Crucially, the Party said it would also target extra support to squeezed middle, pensioners and the lowest earners, receiving up to £600 off bills and preventing all of the increase in energy bills currently expected.

Part of Labour’s package to keep energy bills low would be achieved through scrapping VAT off home energy bills for a whole year – alongside focused and targeted support through increasing and expanding the Warm Homes Discount to 9.3 million people.

Ed Miliband MP, Labour’s Shadow Climate Change and Net Zero Secretary, said:

“The Government – and all the Tory MPs who have previously backed a VAT cut on home energy bills – should follow through with their promises and vote with Labour today to scrap the tax for a year, as hard working people face a growing cost of living crisis.

“The Conservatives’ clear opposition to the windfall tax tells you exactly whose side they are on – and it’s not the British people struggling with their energy bills.

“It tells you everything you need to know about this Government that they believe we should prioritise oil and gas companies making huge windfall profits that they say are ‘struggling’, rather than the British people who face the true struggle to pay their energy bills.

“Labour will stand up for the millions of families across the country, with a package that won’t just help the average household with around £200 off bills, but also targeted and focused support for those who need it most – including low earners, pensioners and the squeezed middle – with up to £600 in total off their bills.”