Boris Johnson and Rishi Sunak are considering a U-turn over energy bills that would see VAT cut or scrapped to relieve the pressure on hard-pressed families.
The Prime Minister has previously repudiated the idea saying that cutting the tax was a blunt instrument, but may be forced to act in the face of increasing political pressure.
Labour is set to pile additional pressure on the Government over the rising cost of living by challenging MPs to back up past pledges on cutting VAT, and in an opposition day debate in the Commons on Tuesday, the party will put forward a motion which, if enacted, would push MPs to vote on the proposals, and it could entice support from disaffected Tories dissatisfied at the increased burden.
A newspaper outlet reported that a VAT scratch and reductions in green levies designed to help boost eco-friendly power generation were also cited in a meeting between the Prime Minister and the chancellor.
Meanwhile, the oil and gas industry hit back against Labour’s demands for a windfall tax on profits as prices skyrocket, and in November BP boss Bernard Looney said the company was a cash machine at those types of prices, but Oil and Gas UK said that the Treasury was already getting a tax income boost from the price rise.
Jenny Stanning, OGUK’s external relations director, said that their industry pays up to 40 per cent corporation tax on its profits, approximately double any other sector, which means that the UK Treasury is already gaining greatly from those price rises.
She said that it was anticipated to get an extra £3 billion in corporation taxes in the two years from last April, making a total of about £5 billion based on Treasury figures.
Labour has suggested cutting VAT on energy bills for a year, alongside a windfall tax on the North Sea oil and gas industry, to help support those struggling as energy prices increase.
But the Government has so far resisted creating moves on VAT, and Education Secretary Nadhim Zahawi said oil and gas companies were already struggling.
However, Labour said the industry was expected to report a near-record income in 2021-22.
They pointed to earlier promises made by members of the Government on VAT on energy bills, including Prime Minister Boris Johnson and Levelling Up Secretary Michael Gove.
Writing in The Sun in 2016 they said that leaving the EU would permit the UK to scrap VAT on energy bills, calling it unfair.
But it looks like people will have to trim back on extravagant things, although most people have already trimmed a lot of the fat to keep up with their rising bills because people with young children have no other option if they want to keep their houses heated, and it’s absurd that as a developed country families are having to trim back if they don’t want to end up in poverty.
From April 2022, the repeat prescription charge is about to increase to the new pension age. So, no free prescriptions will be available for the over 60’s and they will now have to wait until they’re 66. That’s £9.35+ per item for your GP prescription medication, whilst MP’s get a £2,000 yearly increase and expenses paid.
The world is a different place now, and numerous governments, ours included, after we left the EU and then COVID unexpectedly came about the governments have to find a way back from that. The problem is, our grandchildren will still be paying it back after many of us have gone because governments have created this shortage and destroyed the country on purpose and it’s about time people started to wake up and we’ve been lied to.