£2bn off energy bills if we scrap unfair VAT says Gove
LEAVING the EU would let Britain slash energy bills by £2billion a year, Brexit campaigners claimed yesterday.
Justice Secretary Michael Gove and former London mayor Boris Johnson said quitting the EU would allow the UK to scrap ‘unfair’ VAT on domestic fuel.
The tax was first put on domestic fuel bills in 1994 at 8 per cent, and was cut to the minimum 5 per cent rate in 1997.
But VAT on a product or service cannot be reduced below 5 per cent without the agreement of all other EU states and the European Commission.
Mr Gove said Brexit campaigners would push for it to be scrapped if Britain left the EU, adding: ‘As long as we are in the EU, we are not allowed to cut this tax. I think it would be the right thing to do because VAT is a very unfair tax. It hits the poorest people hardest – fuel for the poorest households is about £105 of their weekly income.
‘It would be a really good thing if we could help the poorest people by removing this unfair burden on them.’
Chancellor George Osborne attacked the proposal as ‘fantasy economics’, suggesting that the Vote Leave campaign had given no indication of how it would fund the removal of VAT on fuel.
The Remain camp said Brexit supporters had made commitments that would exhaust the £8billion-a-year savings from leaving the EU many times over.
Will Straw, of Britain Stronger In Europe, accused Brexit supporters of racking up £111billion in uncosted spending commitments.
But Commons leader and Leave campaigner Chris Grayling dismissed this figure as ‘a complete fallacy’.