Charlotte Cane MP on VAT Cut for Heating Bills
The Liberal Democrats say Andy Burnham’s plan to remove VAT from domestic electricity bills in October does not go far enough to help struggling households.
The Government’s scheme to cut the rate of VAT applied to household electricity from 5% to 0%, starting on 1 October would save people around £45 a year.
Charlotte Cane says the Lib Dems’ ‘Essential Energy Guarantee plan’ would save the average household more than double this amount.
It would cut energy bills by £100 for the average household in Ely and East Cambridgeshire, helping to tackle the cost-of-living crisis and put money back in people’s pockets.
It would see every household receive a basic energy allowance, equivalent to 50% of average energy consumption, at a discounted rate, helping with the cost of everyday essential energy needs like heating, lighting, and running medical equipment.
Charlotte also adds that Burnham's VAT cut, is once again an example of Labour forgetting about rural Britain, and households that rely on heating oil. In Ely and East Cambridgeshire, 26.3% of households are disconnected from the gas grid, making them reliant on heating oil or LPG to heat their homes.
Liberal Democrats say they have consistently stood behind rural communities to fight for better protections, including calling for a three-month zero-rating of VAT on heating oil for all residential homes, plus a price cap to shield against sudden spikes.
According to House of Commons Library data, around 9.6% of local households in Ely and East Cambridgeshire are in fuel poverty, struggling to afford their most basic energy needs.
The Liberal Democrats Essential Energy Guarantee intervention would save the average household £100 a year, while the poorest 20% would save an average of £140.
Families would receive extra allowances for children, and the most vulnerable - such as people with disabilities or on the lowest incomes - would receive the discounted rate on all their energy use.
The Liberal Democrats scheme will be funded by clawing back £7 billion in unexpected windfall profits from monopoly energy network operators.
However, funding for the Government’s VAT cut has already been criticised by a former Labour minister. It was announced the Government would reallocate funds from the now-scrapped Digital ID scheme, which Darren Jones has pointed out was “unfunded”, in a social media post.
Charlotte Cane MP for Ely and East Cambridgeshire said:
“Families across Ely and East Cambridgeshire need real help with the cost of living, and cutting VAT on energy bills falls far short of what is needed. For many households, it would barely make a dent in the huge increases they have seen in their monthly bills.
“That is why the Liberal Democrats are calling for an Essential Energy Guarantee, giving people the support they need to keep their homes warm without worrying about how they will make ends meet.
“We must also stop rural households being overlooked. Too many families in our area depend on heating oil or LPG, leaving them exposed to sudden and dramatic price rises. After the shocks we saw earlier this year, stronger consumer safeguards and a fair price cap are urgently needed to protect people from future spikes.
“While there may be a new Prime Minister in Downing Street, the Government still seems out of touch with the realities facing rural communities. Unless ministers act, many households in villages and market towns across our area will continue to pay the price.
“Heating your home is not a luxury – it is a basic necessity. It is simply unacceptable that 4,487 households across Ely and East Cambridgeshire are in fuel poverty.”