VAT removal ‘won’t cut it’ for Liverpool residents as Opposition Leader urges Burnham to back Lib Dem plans to slash bills

The 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 rate of VAT applied to household electricity from 5% to 0%, starting on 1 October, would save people around £45 a year.

Leader of the Liverpool Liberal Democrats, Cllr Carl Cashman, says, however, the Lib Dems’ ‘Essential Energy Guarantee plan’ would save the average household more than double this amount.

It would cut energy bills by £100 for the average household in Liverpool, helping to tackle the cost of living crisis and put money back in people’s pockets.

It would see every household receive a basic energy allowance, equivalent to 50% of 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 House of Commons Library data, an average of 14.6% of local households across the five Liverpool constituencies are in fuel poverty, struggling to afford their most basic energy needs.

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

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 the Government would reallocate funds from the now-scrapped Digital ID scheme, which Darren Jones has pointed out was “unfunded”, in a social media post.

Leader of the Liverpool Liberal Democrats, Cllr Carl Cashman, said:

“We need to get money back into the pockets of people in Liverpool, 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 Liverpool 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  33,254 households in Liverpool worry every day about keeping their homes warm.”