Call to cut VAT from domestic fuel bills

A CONSERVATIVE county councillor has called on the Government to do more to support the households worst-hit by rising energy costs.

Coun Wayne Daley, who represents Cramlington North on Northumberland County Council, believes VAT should be removed from domestic fuel bills.

He also called on the Government to transfer some of the green levy placed on energy bills to support a “cold homes payment” for struggling households - particularly those in the colder North.

Figures from the energy regulator Ofgem showed households are paying an average of £1,277 for gas and electricity. However, that figure is set to increase sharply in the coming months due to rises in wholesale prices and the Government’s price cap.

Various predictions feel that household bills could increase by as much as £700 per year in April. Of that bill, 15.3 per cent – or £195 a year – goes on ‘environmental and social costs.’ On electricity bills, this figure rises to 25.5 per cent, with the money going to fund a number of green energy initiatives.

Coun Daley said heating homes “isn’t a luxury” and outlined three measures he felt the Government should take to temper the coming crisis.

He said: “There is a five per cent VAT levy on energy bills. With the average energy costs, it would actually save you about £100.

“It’s part of how we deal with a cost of living crisis. Heating your home to a temperature where you can live at safely shouldn’t be a luxury. I think the chancellor should pull it.

“The other thing is at the same time as we’re facing massive increases we’ve still got these green levies.

“Everybody wants to protect the planet and do the right thing, but we need to have a look, even if it is temporary, to focusing part of that level on a cold homes payment, put some of it aside to protect our most vulnerable people. That would be a sensible thing to do.

“We also need to have a proper home insulation programme in place. Ones in the past haven’t worked, we need a proper system and it shouldn’t be something that people have to apply for, it should be mandatory across the country.

“We need a proper sensible plan to insulate homes, it’s been coming for decades and no Government has got it right and here’s an opportunity.”

Coun Daley is concerned the rising fuel bills could force some households into impossible decisions. He added that the problem is worse in the north where average temperatures are far lower than the south.

Coun Daley continued: “When we talk about a NorthSouth divide, I’ve checked the average temperature differences between Newcastle and London and it’s 6C on average – but it can be up to 11.

“It is colder in the north than the south and that’s never really reflected in policy-making.

“I think the Government have a real opportunity, particularly with all those seats they took from Labour.

“Without the green levies, you would be looking at around a £260 to £270 a year saving. I think most people would welcome that.

“We have to do something, or moving into cold spells in 2022 people will be choosing between eating and heating. That can’t happen in this country.

“I’m calling on my own chancellor, my own party, to support marginalised communities.

“It is a public health matter. It’s something the Government need to tackle.”

A spokesman for the Department of Business, Energy, and Industrial Strategy said: “The Energy Price Cap is currently insulating millions of consumers from high global gas prices. We’ll continue to listen to consumers and businesses on how to manage the costs of energy.”