Rishi Sunak 'in hiding' says Rachel Reeves as Labour launches plan to cut VAT on UK energy bills

Labour would tax North Sea oil and gas companies to help reduce VAT on UK energy bills, ministers have heard.

Setting out Labour’s plans for a VAT cut to household energy bills, shadow chancellor Rachel Reeves said: “Our plan would save households £200 off their bills, with up to £600 in total for those who need it most.

“We will pay for this with a windfall tax on North Sea oil and gas profits. These companies have profited massively because of exploding prices. So much so, that some in the industry have referred to soaring energy prices as a cash machine for producers and their shareholders.”

She also accused the Chancellor Rishi Sunak of being “in hiding”.

Ms Reeves said: “He wasn’t here yesterday when we debated fiscal responsibility, he is not here today to debate the cost of living. Maybe he has gone back to California. Had he been here, I wouldn’t have just asked him about his broken promises on VAT, I would also have asked given that the Chancellor of the Exchequer lives and works next door to Number 10 Downing Street how long has he known about the party on May 20 2020 and what has he said and done about this disgraceful breach of lockdown rules?

“Was the Chancellor at the party when it happened next door or was he at his window taking the pictures?”

South Northamptonshire MP Andrea Leadsom said Labour’s proposals to cut VAT for household energy bills were “cynical”.

The Conservative former minister has said: “I am incredibly disappointed because she (Rachel Reeves) is making some very good points about the cost of living.

“But today’s motion is cynical – it has got nothing to do with trying to save costs for consumers and everything to do with Labour trying to make a point about taking control of the order paper just like they tried to do during the Brexit debate, trying to undermine their Government and what they know full well is that the Government cannot possibly accept such a cynical tactic from Labour, so will have to vote it down without any consideration whatsoever.

“She knows that: This is not about Labour trying to save consumers, this is just about Labour playing politics.”

Shadow chancellor Rachel Reeves replied by quoting the Conservative former minister’s own words.

Ms Reeves said: “On June 9 2016 she said: ‘We are unable to get rid of VAT on fuel bills because the EU prevents us from doing so, despite fuel poverty’. Well nothing prevents her from doing the right thing today by voting with us this evening’.”

Shadow chancellor Rachel Reeves said: “The Prime Minister seems to think that the cost of living crisis is when you can’t find a friend to pay for the luxury refurbishment of your flat, but for working people in our country, a cost of living crisis means struggling to pay your gas and electricity bills.”

Responding, Chief Secretary to the Treasury Simon Clarke said: “The Government recognises the pressure that people are facing on their household finances including on their energy bills and we have taken steps already to ease those pressures where and when we can and we will of course continue to look at other things that we can do.”

“The reality is that the higher inflation that we’ve seen is primarily due to global factors relating to a large degree to the fallout from the pandemic and to a global spike in energy costs.

“This Government is never afraid to do what is right or take big decisions on behalf of this country and the action we’ve taken during the pandemic is testament to that fact, £400 billion of direct support to the economy protecting millions of jobs and livelihoods.”

This comes after GB News has launched a campaign to call on the Treasury and broader government to "Scrap the Vat” on UK household energy bills.

GB News' Liam Halligan has committed to promoting the campaign with 'On The Money' special coverage, asking Boris to scrap the VAT "as inflation builds, tax rises loom and energy costs are about to spiral even more."