Labour increased pressure on ministers to reduce fuel bills for the hard-pressed Brits by cutting VAT.
Shadow Chancellor Rachel Reeves asked Boris Johnson, Rishi Sunak and Rishi Tong to ‘get a handle’ on the cost-of-living crisis by removing the levy from six months to winter.
The party’s analysis revealed that those in poverty pay more on average for their electricity and gas than those who live comfortably.
It found the poorest 10 per cent of households pay on average £756 a year per person for electricity, gas and other fuels.
Labour said this was an extra 50 per cent above what the richest households pay, at £504 per person on average, and more than the national average at £530.
Ms Reeves said: ‘We must get a grip on this cost of living crisis. Labour would immediately cut VAT on domestic energy bills for the next six month to help people get through winter.
Shadow Chancellor Rachel Reeves urged Rishi and BVoris Johnson to ‘get a grasp’ on the crisis in the cost of living by axing levy for six more months.
The party’s analysis revealed that those in poverty pay more on average for electricity and gas than those who live comfortably.
Labour suggested that the VAT on domestic energy bills could be reduced from 5% down to zero as soon as November 1, Labour stated. It should be in place for six month and automatically deducted from bills to cover high winter energy costs.
The party suggested that the cut could also be funded by higher than anticipated VAT receipts since the beginning of the year.
Reports suggest that Mr Sunak was considering a cut. This claim has been supported by some Tory MPs.
Robert Halfon, Conservative chair of House of Commons education committee, stated previously to the Financial Times, “showing we are doing something for consumers”, that cutting VAT would be “show we’re doing something”.
He also said that it would honor a Brexit promise, as EU rules do not allow VAT to be lower than 5% on energy bills.
The FT also stated that Sir Christopher Chope, Conservative great, supported the move.
However, the newspaper reported that no decisions had been made.