VAT removal ‘won’t cut it’ for Reading dents as Reading Lib Dems urge Burnham to back Lib Dem plans to slash bills

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

The Government’s scheme to cut the VAT rate applied to household electricity from 5% to 0%, starting on 1 October, would save people around £45 a year.

Under the Liberal Democrats’ ‘Essential Energy Guarantee’ plan, the average household would save more than twice this amount, putting money back in people’s pockets.

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

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

According to data from the House of Commons Library, one in nine local households in Reading Central are in fuel poverty, struggling to afford their basic energy needs.

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.

However, funding for the Government’s VAT cut has already been criticised by a former Labour minister. It was announced that the Government would reallocate funds from the now-scrapped Digital ID scheme, which Darren Jones pointed out was “unfunded” in a social media post.

Liberal Democrat Councillor for Tilehurst, James Moore said:

“We need to get money back into the pockets of people in Reading, 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 facing.

“The Liberal Democrat plans for an Essential Energy Guarantee would provide immediate and meaningful relief, ensuring that nobody in Reading is forced to choose between heating and eating.

"Heating your home is not a luxury, it is a fundamental need. It’s a scandal that over 5,000 households in our area worry every day about keeping their homes warm.”