Labour have brought forward an Opposition Debate this morning on the subject of Value Added Tax on household energy bills, where they will call for the government to remove VAT on energy in the face of rising bills – incidentally, something only legally possible because of Brexit. This is quite some U-turn.

According to research from the Taxpayers’ Alliance, the Climate Change Levy (2001) and Renewables Obligation (2002) took £14.5 billion out of bill payers’ pockets under the Labour government. Ed Miliband was the last Labour Energy and Climate Change Secretary. The Tories have continued the trend, by upping the tax take on energy bills with green levies set to hit over £18 billion a year. These new taxes were introduced and by Labour…
As Energy Secretary, Miliband justified the added costs to business by saying we should sacrifice economic growth to cut emissions:

“We can either lose three months or six months of economic growth, for the world, and act, or we face this huge risk in relation to the cost of adapting to climate change”.

Between 1997 and 2010, the average domestic gas bill went up by 105%, from £275 to £564, and the average electricity bill went up 47%, from £323 to £474. (Source DECC, Quarterly energy prices, table 2.2.1, December 2014).

The TaxPayers’ Alliance’s James Roberts says:

“It seems eco-preaching politicians are finally wising up to the fact that higher green taxes mean higher energy bills. Now they’ve got until April to do something about it, before taxpayers are hammered by rising bills and other tax hikes.”

Labour may have finally seen the light on energy taxes. Has the government?