- Removal of VAT from electricity bills starts today.
- Tax cut will help households with their energy bills by
taking around £45 off the yearly Ofgem price cap.
- Part of Prime Minister's wider plan for everyday fixes' to
give families some breathing space.
Households will be better protected from rising global energy
costs this winter after the Government cuts tax on household
electricity bills from today.
The action keeps the Energy Price Cap £45 a year less than it
would have been, giving people a bit of breathing space on their
energy bills between October and December.
Around a third of households are on fixed tariffs and therefore
will not be affected by the Energy Price Cap rise. The Government
expects suppliers to pass on the VAT cut to these customers too,
meaning they could be in line for their energy bills to fall
overall. The Government encourages people to shop around for the
best deal for their home.
This is the latest measure in the Prime Minister's series of
everyday fixes' to give families room to breathe. It follows
action to cap bus fares at £2, ban fake discounts and end
subscription traps, as well as cracking down on school
uniform-rip offs and cut business-rates for the pubs, social
clubs and high-street businesses that hold communities together.
Prime Minister Andy said:
"For many families, the energy bill is the one they dread the
most. I don't accept that it has to be this way, and I am
determined to bring down costs for good.
"But I know people can't wait. Families need breathing space
now.
That's why, from today, VAT is gone from your electricity
bill. And we're going further, capping bus fares at £2 from
January and cutting business rates for pubs, social clubs and
live music venues".
While the Government is giving people short term relief on their
energy bills, it is also taking action to fix Britain's energy
problems for the long term.
This week the Prime Minister committed to reduce energy costs so
that they are in line with other countries in Europe within ten
years by introducing greater public control in the system. He
announced a new publicly owned body within Great British Energy -
Great British Grid (GB Grid) - alongside other reforms to help
improve competition, speed up grid connections for businesses,
and lower costs.
It will help to reform the broken energy market so it better
serves the public interest. Other measures include the delivery
of Sizewell C to kickstart a golden era of nuclear, and
investment in homegrown, clean energy production.
Chancellor of the Exchequer, MP, said:
This tax cut will help keep energy bills down a bit as we
head into the winter.
We are acting on cost of living pressures to give people some
breathing space for the next few months while we make long-term
changes to better shield the country from global shocks like
those we face today.
Secretary of State for Energy Security and Net Zero,
MP, said:
"I know energy price rises weigh heavily on homes across the
UK this winter.
"From today, our VAT cut will give households some much
needed breathing space, making the energy price cap £45 a year
less than it would have been. This follows the £150 of costs we
removed from bills earlier this year.
"Alongside this, we continue to look at what more we can do
to protect families from unaffordable bills, as we drive down
bills for good through clean power."
Savings for households depends on how much energy they use, but
the cut will help families keep more money in their pockets as
temperatures fall and energy use typically increases.
The move follows a rise in global energy costs linked to the
conflict in the Middle East and reflects the Government's
commitment to give people some breathing space, taking practical
action where it can make the biggest difference.
This builds on the £150 of costs taken off energy bills in the
Budget last year and expansion of the £150 Warm Home Discount to
around six million households. Our Warm Homes Plan will also
lower bills for millions of households and help lift households
out of fuel poverty.
