Osborne urged to hand back energy VAT

Post by Tom on 28th November 2011 in

Osborne urged to hand back energy VAT

Several campaigning groups have joined forces to encourage chancellor George Osborne to reinvest VAT proceeds from soaring gas and electricity bills into helping cash-strapped consumers keep their homes warm. 

Ahead of this week’s autumn statement, a total of nine groups – including Friends of the Earth, National Energy Action and Which? – sent a letter to Mr Osborne outlining their concerns over the impact of rising energy prices over the coming winter months. 

The organisations estimate that the Treasury has raked in £200m in VAT on energy bills since this autumn’s price hikes were introduced and called on Mr Osborne to plough the money into schemes such as Warm Front and the Community Energy Saving Partnership. 

“The recent price hikes from the major energy suppliers will generate for the Treasury an extra £200m in VAT. More than half the homes in the UK don't have sufficient insulation,” they stated. “By investing this VAT windfall immediately in existing energy efficiency programmes, the government could make a real difference.” 

Utilities provider British Gas last week announced plans to simplify its tariffs, while independent supplier Ovo Energy confirmed it would not go ahead with its planned price rise.

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