Sunak vows to scrap taxes on energy bills
LONDON: Former finance minister Rishi Sunak, trailing in the race to become Britain’s next prime minister, pledged on Wednesday to temporarily scrap taxes on energy bills paid by households as part of a “winter plan” to ease the cost-ofliving crisis.
The year-long hiatus on paying value-added tax (VAT) on energy bills would save the average household £160, Sunak said.
“This temporary and targeted tax cut will get people the support they need whilst also - critically - bearing down on price pressures,” Sunak said.
Foreign Secretary Liz Truss, the bookmakers’ favourite to succeed Johnson, has outlined a wider range of tax cuts that Sunak has branded irresponsible.
Truss, who last week held a 24-point lead over Sunak among Conservative Party members according to Yougov, has repeatedly warned that Sunak’s plans will tip Britain into recession.
The Institute for Fiscal Studies, a think tank, said cuting VAT on energy bills would be “small beer” compared with the coming surge in energy bills.
By providing more support to those who use more energy, a VAT cut “would be well targeted at those who face the biggest rise in their energy bills, but not at those — the poorest — who are least able to cope with the rise in costs,” said Stuart Adam, senior economist at the IFS.
Business minister Kwasi Kwarteng, a Truss supporter, said Sunak had performed “a screeching handbrake turn” on his previous stance against cut tax cuts.
Pollster Chris Curtis from Opinium Research said Sunak had diluted his message of fiscal conservatism with Wednesday’s announcement.
“I don’t think it’ll work particularly well for Rishi Sunak. I think he has created a rod for his own back here,” Curtis told Sky News.
Meanwhile, Britain’s rail network faced major disruption again on Wednesday as staff walked out in a row over pay and conditions.
The 24-hour strike by more than 40,000 members of the RMT and TSSA unions forced around half of Britain’s rail network to close, with train companies operating a much reduced timetable and some parts of the country having no rail service at all.
Network Rail urged passengers, including commuters, families heading off on summer holidays, and sports fans on their way to the Commonwealth Games in Birmingham which begins on Thursday, to only travel if necessary.