£1BN RISHI TAX BOOST FROM YOUR FUEL BILLS

Tories urged to slash 5% VAT rate

CHANCELLOR Rishi Sunak is poised to seize a £973million windfall from families when energy bills rocket in April.

Ministers are resisting calls from Labour and the Mirror to slash the 5% VAT on home fuel costs despite fears looming bill rises will plunge more people into poverty.

With bills set to climb by £700 when the price cap is lifted, households will cough up an extra £35 through VAT.

The overall price hike is expected to cost families £19.46bn. Shadow Chancellor Rachel Reeves said: “People are being hit by a cost-of-living crisis. That’s why Labour is calling on the Government to remove VAT on domestic energy bills over winter.”

Treasury sources claimed higher gas and power prices, which have a 5% VAT rate, cut the amount of cash it rakes in as people have less to spend on goods with a 20% rate. A spokesman for No10 said returns are forecast to be £2bn less than before Covid. He insisted: “There has been no VAT windfall.” The Tories have added fuel grants for families as well as the £500m Household Support Fund. As bills soar,

Shell said it made £1.24bn profit from its gas arm in the third quarter of last year.

The Lib Dems have led calls for a “Robin Hood” levy on fuel firms’ profits.

The Mirror revealed Shell and BP raked in £10.2bn in three months but industry officials said the tax would cause “irreparable damage”.

It was warned rising inflation has added to the pay squeeze. The past decade had the lowest rise in real wages, when living costs are included, since the early 1800s.

The Government scrapping the £20-a-week Universal Credit uplift has also hit families.

After his

ITV show,

Money Saving Expert Martin

Lewis said he OUTRAGE felt “impotent” Martin Lewis after being unable to help a mum, who lost her partner to Covid, to afford energy bills. ben.glaze@mirror.co.uk

@benglaze

If you thought the cost of festive food had gone up, you are right.

Grocery prices rose

3.5% in December, adding £15 a month to the average shop.

Some items have shot up more, with fresh beef rising 12% in price in the past year, savoury snacks by 11% and apples by 20%.

Analyst Clive Black from Shore Capital reckons food inflation will peak at about 5% at Easter, adding more than £21 to our bills.

The British Retail Consortium’s Helen Dickinson warns: “The trajectory is very clear: prices will keep rising, and at a faster rate.”