Labor is calling for a windfall tax on North Sea oil and gas to pay for a range of measures that would cut household energy bills by around £ 600 a year for the lowest wages in the country.
The plan, unveiled today, would save every consumer just under £ 200 a year and 9 million of the country’s hardest-hit people would get an extra £ 400 off their annual bills.
The sweeping change in party policy, first reported by The Sun on Sunday, comes as energy bills are set to rise to as much as £ 700 a year when the energy price cap rises in April in response to rising world prices.
Phantom Chancellor Rachel Reeves said a Labor government would save consumers on average £ 100 a year by reducing VAT on energy bills and £ 94 by removing the cost of supplier default and spanning five years.
The 9 million Brits least able to pay their energy bills will also receive an additional £ 400 through an extension of the Warm Homes discount.
Reeves said a large chunk would be paid for by a one-time corporate tax increase in 2022-2023 for North Sea oil and gas producers.
“There is a global price spike, but the UK is particularly at risk due to the inability to properly insulate our homes, the inability to invest in nuclear, hydrogen and renewables, a crazy decision to get rid of our gas storage facilities. and a failure to properly regulate the market, ”Reeves told the BBC.
“For example, we know of retirees who have to stay longer, who need to heat their homes more warmly, and families already grappling with the cost of living crisis are paying a higher proportion of their income on these bills. [Cutting VAT on energy bills] is a practical thing the government can do right now to help people get through this difficult time. “
Boris Johnson has also been pushed by some Tory backbench MPs to cut VAT on energy bills – political leverage which has been granted to the UK now that it is outside the EU.
However, the Prime Minister said last week that it is too much of a “blunt instrument” that will also benefit households that do not need help.
Responding to this, Reeves said, “Everyone is experiencing an increase in their gas and electric bills right now, this is something practical the government could do and it would be felt immediately. What is needed is something for all of those who are seeing their bills go up, and then some extra support targeted at those who are having the most difficulty. “