Budget 2021:Chancellor Rishi Sunak Inflation likely to rise further

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At the height of the Vote Leave campaign in 2016, Boris Johnson and Michael Gove promised to scrap the EU’s five percent VAT on household energy. According to the pair, the move would restore control over the UK’s energy market into the hands of Westminster and usher in cheaper energy bills for all. But the Government has failed to deliver on this promise and will not scrap the “unfair and damaging tax” as revealed today in Chancellor Rishi Sunak’s Autumn Budget.

In the wake of Europe’s ongoing energy crunch and the threat of a bitter winter just around the corner, the Government has faced mounting pressure to scrap the VAT.

Doing so would have helped many Britons facing the possibility of exorbitant energy bills and has been called a “good solution” to the brewing winter crisis.

Instead, Mr Sunak revealed today the Government will increase funding for the devolved governments, invest £1.7billion in the Levelling Up Fund, and extend tax relief for museums and galleries, among others.

The Chancellor’s refusal to scrap the five percent VAT on energy amounts to an outright betrayal of Brexit voters, according to Mike Foster, CEO of the Energies and Utilities Alliance (EUA).

He told Express.co.uk: “I think it’s a real letdown for consumers.

“They had been promised the cut back in the Brexit referendum and perhaps forgot about it until energy prices started to rocket.

“Suddenly, it becomes a far more pressing matter for consumers when they are seeing their energy bills rise by hundreds of pounds a year, and five percent of that going straight to the taxman even though the Prime Minister had made it very clear he was going to scrap that tax.

“And so there was an opportunity today to put the matter right but I think a lot of people will feel betrayed.”

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According to the energy expert, there is a growing demand in the country for the tax to be scrapped.

A recent survey carried out by the EUA found more than two-thirds of those questioned were in support of the move.

And though the savings would not be massive – about £65 for customers on the £1,277 price cap – Mr Foster believes they would still go a long way to help keep costs down this winter.

Energy prices have skyrocketed in recent months due to a combination of unfortunate factors.

Coming out of the Covid pandemic, the world as a whole has experienced a thirst for energy.

Dwindling supplies of natural gas have taken a toll on Europe and the UK, and many experts have accused Russia of withholding supplies to score political leverage.

Since the start of the year, the dire situation has led to 14 small energy suppliers across the UK to go bust.

Mr Foster said scrapping the five percent VAT today would have gone a long way towards protecting consumers and making good on the Government’s Brexit promises.

He added: “The Government has clearly betrayed people who voted for Brexit, knowing or hoping or being promised, that VAT on energy bills would be scrapped.

“That was clearly told by the Prime Minister at the time when he was campaigning for Brexit.

“He made it clear he wanted to scrap VAT on energy.

“He had the chance to do it when it really mattered, with bills arriving, and I think millions of people will feel betrayed today.”

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