Rishi Sunak is refusing to cut VAT on energy bill’s on Wednesday’s Autumn Budget despite Boris Johnson pledging to scrap it which was part of the Brexit campaign.
Michael Gove and the Prime Minister wrote in a joint article during the Brexit campaign saying, “When we Vote Leave, we will be able to scrap this unfair and damaging tax.
“It isn’t right that unelected bureaucrats in Brussels impose taxes on the poorest and elected British politicians can do nothing.”
If the government were to cut VAT on energy bills this would cost the Treasury around £1.6bn.
The Chancellor has been under pressure recently to cut the VAT as energy bills are soaring which has caused many energy suppliers to go bust.
Labour’s Shadow Chancellor Rachel Reeves has called on the government to deliver on the promises that were made during the Brexit campaign which was made for the 2016 referendum.
Reeves told the Daily Mail, “They said it in the referendum campaign so why have they not done it?
“What more evidence do you need to cut VAT domestic energy bills?
“This is the time to do it when they are soaring so much.
“The good thing about cutting VAT is it can be done immediately and automatically on bills.
“So people don’t have to apply for it, there’s no bureaucracy to go through and everybody is affected by rising gas electricity bills.”
The Chancellor will not cut the tax as he believes it would end up being “poorly targeted” which would end up “subsidising thousands of well-off households and not providing enough help to those who most need it.”