Energy bill discount could be extended to more homes

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A series of senior Tory MPs have voiced concerns about a cost of living squeeze coming in April, when energy bills are set to soar just as a planned National Insurance tax rise is due to come into force.

Meanwhile inflation, which rose last month to 5.1 per cent, is reducing Britons’ spending power, with a particular impact on pensioners.

On Tuesday, Mr Johnson dismissed calls, backed by some Conservatives and the Labour Party, to axe VAT on energy bills to help household finances.

He branded the proposal “a bit of a blunt instrument”, arguing that “the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it”.

It marked a U-turn on his previous vow, made in May 2016, that the tax would be scrapped from energy bills if Britons voted for Brexit. The European Union mandates that member states must levy a minimum rate of five per cent VAT on energy.

Scrapping the tax would save an average household around £60 a year on their energy bills, while costing the Treasury £1.7 billion.

While he appeared to rule out the move, the Prime Minister hinted that the Government is prepared to offer additional support, however. 

“We need to help people who are in fuel poverty the most,” he said, stressing that Chancellor Rishi Sunak is “very, very mindful of the increase in energy prices and the effect … on people up and down this country, and we are going to do all we can to help”.

On Wednesday, he name-checked the Warm Home Discount twice in the Commons in response to pressure from opposition parties about rising living costs during Prime Minister’s Questions. However, Mr Johnson appeared to misspeak, incorrectly describing it as a scheme worth £140 a week, rather than per year.

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