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Cross-party effort to scrap VAT on energy bills

By Alan Hendry

Households could see energy bills increase as much as £195 a year as a result of spending more time at home.
Households could see energy bills increase as much as £195 a year as a result of spending more time at home.

North MP Jamie Stone has secured cross-party support for his letter to the Chancellor Rishi Sunak calling for a moratorium on VAT on energy bills through the coronavirus crisis.

The letter comes in the wake of figures from Uswitch, a price comparison service, forecasting that households could see bills increase as much as £195 a year as a result of spending more time at home to self-isolate.

Mr Stone, the Liberal Democrat MP for Caithness, Sutherland and Easter Ross, said: "Right across the UK people are desperately worried about how they will make ends meet in the face of this crisis.

"Many already find themselves out of work, on reduced pay or having to rely on Universal Credit. Ensuring people using prepaid meters are not cut off is a first step, but there are many who will need further assistance.

"The very least the Government can do is offer people a break from VAT on energy bills – this would be a quick and effective step which will immediately assist some of the poorest in our society. It will at least partly alleviate the additional financial pressure created by the need to stay at home."

The full text of the letter:

Dear Chancellor of the Exchequer

We are writing to you about the possibility of introducing a VAT moratorium on energy bills and products for the foreseeable future.

We welcome your move to implement a VAT deferral for businesses till 30 June 2020, but wonder if something similar could be done for all energy customers. Given that most of us are spending a lot more time at home self-isolating, there is no doubt that our energy bills will dramatically increase. Uswitch estimate that self-isolating could mean an extra £195 a year for individuals on poor-value deals. For many people in the UK, some of whom are hard hit by fuel poverty, a VAT moratorium on electricity bills would be a huge help in the weeks and months ahead.

You have already helped more than four million people on prepayment meters by ensuring suppliers offer them funding support if they cannot top up their meters. As more and more people now self-isolate, it is important that we extend this kind of help, especially to those on the poverty line. I am concerned that it is the poorest in our society who will struggle most with self-isolating if their bills drastically increase because they must be at home.

Many of those with low-income jobs have been made redundant and will struggle to find alternative employment as the crisis worsens, making it harder to pay energy bills – and that’s without those bills being on the increase.

A VAT moratorium would be the most simple way of negating the inevitable increase in energy bills whilst we self-isolate to avoid spreading the virus. We hope you will consider our suggestion. Thank you once again for working so collaboratively to help us all combat this crisis.

Yours sincerely,

Jamie Stone MP

Ed Davey MP

Debbie Abrahams MP

Mike Amesbury MP

Paula Barker MP

Alistair Carmichael MP

Feryal Clark MP

Rosie Cooper MP

Janet Daby MP

Martyn Day MP

Allan Dorans MP

Tim Farron MP

Stephen Farry MP

Marion Fellows MP

Yvonne Fovargue MP

Mary Foy MP

Drew Hendry MP

Gerald Jones MP

Afzal Khan MP

David Linden MP

John McNally MP

Layla Moran MP

Graheme Morris MP

John Nicolson MP

Sarah Olney MP

Taiwo Owatemi MP

Marie Rimmer MP

Ian Paisley MP

Naz Shah MP

Virendra Sharma MP

Christopher Stephens MP

Alison Thewliss MP

Yasmin Qureshi MP

  • Information from Uswitch on how UK energy suppliers are offering extra support can be found here.

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