Chancellor Rishi Sunak has come under rising pressure to scrap VAT on energy bills as household bills continue to soar and a cost-of-living crisis looms.
The Government has so far dismissed such calls with Prime Minister Boris Johnson previously saying cutting tax was a “blunt instrument” and would not be effective.
But the Russia-Ukraine conflict has caused further surges in oil and gas prices.
The price of Brent crude oil has risen above $119 the highest since 2012 and petrol has now reached £1.52 according to the RAC. This comes as giants such as BP and Shell sever ties with Russian investments and stocks earlier this week.
Further increases in oil and gas prices could be expected if more sanctions on Russian trade are imposed by the West.
Speaking on Liam Halligan’s On the Money Jasmine Birtles, founder of MoneyMagpie.com, insists UK households must receive more assistance.
Chancellor of the Exchequer Rishi Sunak
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She said on GB News: “The Government need to do something much bigger, they need to take off VAT for a start.”
This notion was seconded by other panel guests.
Mike Cherry, National Chairman for the Federation of Small Businesses, said reducing VAT would also be essential in keeping small businesses afloat amid inflationary pressures.
He said: “Rishi is going to have to look at all this much more carefully in the spring statement given all the problems that are out in the global arena at the moment.
"We do need to see some better action from the Chancellor…It’s not just a review we need it’s a fundamental reform of how we are going to tax business in the future.”
With the Ofgem cap being lifted next month, Labour has also recently piled pressure on the Government to introduce measures that reduce the cost of living.
They propose slashing VAT on energy bills for a year in addition to a drastic reduction in windfall tax.
The Government is also being urged to backtrack on its moratorium on fracking, a move that has attracted support among Tory backbenchers who argue it would give the UK a “competitive and reliable source of energy".
Conservative MPs wrote an open letter to the PM calling for the resumption of fracking following the decision to order shale gas company Cuadrilla to close its two shale gas exploration wells in Lancashire.
The UK consumes 2,795,569 million cubic feet of natural gas per year (as of 2017).
In 2013, the British Geological Survey released a report that estimated the UK’s shale resource was between 822 and 2,2281 trillion cubic feet of gas.
Ms Birtles argued on Liam's show that the Government needs to prioritise lowering energy costs over green levies.
She said: “Id like to see a sensible approach to fracking – we’re going to have to look at it at the very least
“My readers are worried, they’re anxious and depressed looking at the global picture...They’re worried about how they are going to manage."
The money-saving expert continued: “People are looking for any help particularly with food and energy bills. People like me are running out of things to say to make it easier.”
