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Rishi Sunak Accused Of Opposing Cut To Energy Bill VAT Just "Three Weeks Ago"

Rishi Sunak Accused Of Opposing Cut To Energy Bill VAT Just 'Three Weeks Ago'
3 min read

Prominent Liz Truss-backer Kwasi Kwarteng has accused Rishi Sunak of proposing a tax cut that he opposed as recently as three weeks ago.

Last night Sunak pledged that if elected Prime Minister in September he would scrap VAT on all energy bills for a year if the price cap rises above £3000, as is widely predicted. He claims this would save the average household £160 over the next year.

"This temporary and targeted tax cut will get people the support they need whilst also – critically – bearing down on price pressures," he said.

But Truss supporters have been quick to dismiss the pledge as a U-turn, however.

Kwarteng, the Business Secretary, said Sunak had previously described cutting tax at a time of soaring inflation as "fairytale" economics, and that the former-Chancellor had opposed the move throughout his time in the Treasury.

Sunak has built his campaign to succeed Boris Johnson as prime minister on what he has repeatedly described as "sensible" fiscal policy. He has said that he will cut taxes, but only once he has got a grip on inflation.

Truss, on the other hand, has said from the start of the contest that she would cut taxes as soon as she arrives into Number 10, in an economic strategy that Sunak has described as reckless.

Sunak's campaign stressed that this tax cut was temporary, meaning it would not further drive inflation or reduce the government's fiscal head room.

But Kwarteng said he was supporting a candidate "who was much more consistent" on the big question of whether the government should cut tax amid the cost-of-living crisis.

"He [Sunak] said that tax cuts were a fairytale. That was the word he used," he told LBC on Wednesday morning.

"He also implied that he was the grown up because he was simply going to continue the status quo of increasing taxes."

The Cabinet minister added: "Belatedly, I'm very happy to see that he has changed his mind.

"The VAT cut which he is proposing today was the very cut that he opposed when he was Chancellor only three weeks ago.

"We've got to remember that he was in office until around three weeks ago and he was two-and-a-half years in the job where he didn't think it was right to cut VAT on energy bills. 

"Earlier this year I was with him in the House of Commons when he said it was the wrong tax cut because it would disproportionality favour richer households. 

"I'm pleased to say he wants to cut taxes now. I'm pleased to say he has changed his mind."

Defending the move, Transport Secretary Grant Shapps said Sunak's promise to temporarily slash VAT on energy bills was an expansion of the help he had already given to households as Chancellor, and that it is "not accurate" to characterise it as a U-turn.

"He has provided a lot of help in the past on energy bills and overall in this cost-of-living squeeze some £37bn of help," the Sunak backer told BBC Breakfast.

"The idea that providing another £4.2bn in this case, about £160 off energy bills, by removing the VAT for one year only is somehow a departure from what he's been doing is to incorrectly describe what he has in mind, which is trying to help people."

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