Government showing contempt over past promises on cutting energy VAT – Carmichael

Orkney and Shetland MP, Alistair Carmichael, has voiced disappointment after it emerged today that the government will not cut VAT on energy bills. Energy bills are currently taxed at the lower rate of 5% VAT but an elimination of the tax had been lauded by the Prime Minister previously as a promised benefit of leaving the EU. Wholesale energy prices have risen significantly in recent months as winter approaches amid fears of a “Winter of Discontent” with wages failing to keep up with the cost of living.

National Energy Action, which campaigns to combat fuel poverty, said a further 1.2 to 1.5m households could struggle to heat and power their homes next April, on top of the 4m people already estimated to be behind on their bills.

Commenting on the news, Mr Carmichael said:

“The refusal to consider a VAT cut on energy bills in the Budget is disappointing. The Prime Minister and his pals had no hesitation in telling people they would scrap VAT on energy back during the Brexit campaign but now show contempt for the idea that they ought to deliver. They have harvested the pleas of people desperate to escape fuel poverty, with no intent to repay.

“If now is not the time to scrap VAT on household energy bills – in the midst of soaring energy prices and a cost-of-living crisis – then we have to ask if it will ever be the right time. Indeed the excuses coming from the government suggest that they never intended to make good on their promises.

“I have said before that I am not fixed on the exact policies we use to tackle fuel poverty in the isles and elsewhere – what matters is that it happens and that there is energy expended by ministers to make it happen. With the latest dismissal from government I fear we are some way from meaningful action still.”

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