Winchester MP says VAT cut on electricity still overlooking rural households

The Liberal Democrats say Andy Burnham’s plan to remove VAT from domestic electricity bills in October does not go far enough to help struggling rural households.

Danny Chambers, the MP for Winchester, says the Lib Dems’ ‘Essential Energy Guarantee plan’ would save the average household £100, more than double what is expected from the newly announced Government plan. The Government’s scheme to cut VAT on household electricity would save people only £45 a year on average,

The Liberal Democrat Essential Energy Guarantee would cut energy bills by £100 for the average household, helping to tackle the cost of living crisis and put money back in people’s pockets.

It would see every household receive a basic energy allowance, equivalent to 50% of average energy consumption, at a discounted rate, helping with the cost of everyday essential energy needs like heating, lighting, and running medical equipment.

Danny Chambers, Liberal Democrat MP for Winchester said:
"Heating your home is not a luxury, it is a fundamental need. It’s a scandal that almost 4,500 households in our area worry every day about keeping their homes warm. Once again, Labour are forgetting about rural Britain, and households that rely on heating oil. 

“Lib Dems have consistently stood behind rural communities to fight for better protections, including calling for a three-month zero-rating of VAT on heating oil for all residential homes, plus a price cap to shield against sudden spikes, bringing heating oil in line with the regulations for other forms of home energy.”

According to House of Commons Library data, 10% of local households in the Winchester constituency, which includes large portions of the Meon Valley, are in fuel poverty, struggling to afford their most basic energy needs.

The Lib Dems’ Essential Energy Guarantee would save the average household £100 a year, while the poorest 20% would save an average of £140.

Families would receive extra allowances for children, and the most vulnerable - such as people with disabilities or on the lowest incomes would receive the discounted rate on all their energy use.

The Lib Dem scheme will be funded by clawing back £7 billion in unexpected windfall profits from monopoly energy network operators.

Danny Chambers continued:
“We need to get money back into people’s pockets, but tinkering with VAT on energy bills simply doesn't cut it. It is a drop in the ocean compared to the soaring costs families are still facing.

“The Liberal Democrat plans for an Essential Energy Guarantee and calls for a three-month cut to VAT on heating oil would provide immediate and meaningful relief, ensuring that nobody is forced to choose between heating and eating.”