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Wed, 28 October 2020

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As costs increase whilst families self-isolate, VAT on energy bills should be scrapped

As costs increase whilst families self-isolate, VAT on energy bills should be scrapped

Energy bills are forecast to increase in some cases by as much as £195 as a direct result of families staying at home, writes Jamie Stone MP. | PA Images

4 min read

For those who already find themselves out of work or on reduced pay due to coronavirus, the thought of higher bills landing on the doorstep will add unbearable strain.

Coronavirus has presented us with an extraordinary threat to public health. To meet this threat, we must make enormous changes to our normal way of life. Millions of people over the age of 70 or who have underlying medical conditions have now embarked on 12 weeks in self-isolation at home. It has pulled the rug from underneath millions more, including those who have lost their jobs or who have had to close their businesses. It probably won’t be until the immediate crisis has passed that we see its full consequences for our society, our economy, and our healthcare system. 

In my patch - Caithness, Sutherland and Easter Ross - the health service is already stretched, not least by the geography. I am acutely aware of the importance of shielding the most vulnerable from coronavirus. With cold weather and short days, the cost of heating and lighting our homes is expected to increase as people spend more time indoors. In fact, the additional cost of staying at home was made clear just yesterday, when Uswitch revealed that energy bills are forecast to increase in some cases by as much as £195, as a direct result of families staying at home to protect themselves and their communities from this virus. 

For those who already find themselves out of work or on reduced pay, the thought of higher bills landing on the doorstep will add unbearable strain. Knowing the financial pressure so many of my constituents are already under, I am deeply concerned that this will push some of the poorest and most vulnerable into ruin. No one should have to choose between heating their home and feeding their family. Both are essential. 

I therefore welcome the steps already taken by energy companies and Ministers to guarantee that, as things stand, anyone who relies on a prepaid meter is protected from being cut off. However, further action is needed. Millions more households urgently need additional financial relief to avoid falling into arrears through no fault of their own.

Self-isolation and lockdown are key parts of the battle. But confined to our homes, it is inevitable that heating bills will rise. For this reason, I wrote to the Chancellor, with the support of MPs from all sides, asking that the VAT element of energy bills be waived for us all. There does seem to be something faintly immoral about levying taxes on a lifeline essential during a period of such a grave crisis. Waiving this tax represents a quick and effective step to immediately assist some of the poorest in our society, by at least partly alleviating the additional financial pressure created by the need to stay at home. 

The number of colleagues who joined me in signing this letter, including many from the Labour Party and the SNP, as well as fellow Liberal Democrats, is a testament to the fact that this is an issue of enormous concern to MPs across the political spectrum. The government must take notice.  

Already the Chancellor has rolled out substantial support packages which will help keep people afloat, but more must be done to ensure people can continue to heat and light their homes as this crisis unfolds. The last thing we want to see, given the uncertain and difficult road ahead, is people being held to ransom by energy companies for bills they simply cannot pay. 

Given the weight of support behind this request and the urgent need for action, I am hopeful that the Chancellor will act on this call, and scrap VAT on energy bills for the foreseeable future. These are extraordinary times that require extraordinary actions, both from individuals and from the government.

 

Jamie Stone is the Liberal Democrat MP for Caithness, Sutherland and Easter Ross and Spokesperson for Defence. 

 

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