Tackle cost of living crisis by scrapping energy bill tax, Tories urge Boris Johnson

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The intervention will increase the pressure on ministers, who are locked in talks with energy companies and the regulator Ofgem over potential measures to reduce consumer bills.

Urging Mr Johnson and Mr Sunak to use “levers we have to mitigate” the looming increase, the MPs and peers called for the removal of VAT on energy bills, set at five per cent, saying it would be a “small” reduction but a “step in the right direction”.

One of the signatories also pointed that, during the Brexit referendum, both Mr Johnson and Michael Gove said leaving the European Union would allow the UK to reduce energy bills by scrapping VAT.

The letter also called for the removal of environmental levies, used to fund renewable energy subsidy schemes, saying they account for 23 per cent of consumer electricity bills. It is thought the two measures combined could shave up to £200 off the average household bill.

Similarly, the MPs noted that the climate change levy, applied to business energy use, is “making domestic energy intensive businesses uncompetitive and again increases the costs to consumers on virtually everything”.

The MPs also warned Mr Johnson that his net zero strategy must not undermine the UK’s domestic energy supply and urged him to adopt a “new approach to our energy security”.

“We hardly need to point out the risks of reliance on other countries for our energy needs, especially those hostile to us,” they wrote. “This leads to the inescapable conclusion of the need to expand North Sea exploration and for shale gas extraction to be supported.”

Organised by Craig Mackinlay MP, the chairman of the Net Zero Scrutiny Group of Tory MPs, the letter’s signatories include Esther McVey, the former work and pension secretary, Robert Halfon, a former schools minister, and Steve Baker, an ex-Brexit minister.

It comes as Kwasi Kwarteng, the Business Secretary, continues to hold talks with major suppliers who are struggling to cope with record gas prices and the collapse of two dozen smaller companies.

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