Boris Johnson slams Tory demands to reduce VAT on fuel bills… even though he promised that it would be a Brexit dividend.

  • Prime Minister Boris Johnson has rejected calls to cut VAT on fuel
  • Ministers would offer another method to lower the cost of living, he said.
  • Labour, energy firms and certain Tory MPs were pressured by the government to eliminate VAT on fuel

Boris Johnson resisted calls to reduce VAT on petrol last night, but insists ministers will find a way to alleviate the living cost crisis.

The Prime Minister, who once suggested that ending the hated tax on domestic fuel would form part of a Brexit dividend, warned the move could prove a ‘blunt instrument’ that would benefit better-off families more than the needy.

But he said ministers would ‘continue to listen to businesses and consumers about how to abate the costs of energy’. Ministers are under pressure from energy firms, Labour MPs and Tory MPs to eliminate the 5 percent VAT on domestic fuel.

Slashing the levy would cost the Treasury £1.7billion and knock around £60 off an average household fuel bill.

Boris Johnson rejected calls to cut VAT on fuel last night but insisted ministers would find another way to ease the cost of living crisis

Boris Johnson rejected the calls for a reduction in VAT on fuel but insists ministers will find another solution to the living cost crisis

Downing Street stated that there is no assurance the move will bring down overall costs, despite energy prices reaching record highs in recent weeks. Multiple government sources have dismissed this idea.

The use of green levies to finance renewable energy was also supported by No 10.

Mr Johnson’s spokesman said: ‘The exposure to volatile global gas prices underscores the importance of our plan to build a strong, homegrown renewable energy sector to further reduce our reliance on fossil fuels.

‘It’s right that we invest in this and ultimately bring down the cost of renewable energy sources while supporting lower-income and vulnerable households.’ Business Secretary Kwasi Kwarteng is holding talks with energy firms to head off further huge price rises.

Downing Street stated that there is no assurance the move will bring down overall energy bills, despite record-breaking prices for this fuel in recent weeks (stock photo).

Experts have warned the energy price cap could jump by £600 – around 50 per cent, when it is updated in April. A Government source said the price cap held back ‘a tsunami of bill increases’.

Johnson stated that leaving the EU would enable the UK to reduce fuel VAT during the referendum campaign in 2016.

At the time he suggested that ‘energy bills will be lower for everyone’, adding: ‘When we Vote Leave, we will be able to scrap this unfair and damaging tax.’

Asked about his comments yesterday, he rounded on Labour, saying: ‘It’s slightly paradoxical that this is now being campaigned for by people who actually wanted to remain in the EU and still do when it would be impossible to deliver within the EU.’