The Affordable Energy Campaign Give back the VAT

Tube poster with affordable energy campaign

Which? is urging George Osborne to give back £200 million of VAT gained from energy price rises.

After sharp energy price rises, many people will struggle to heat their homes this winter. The recent price rises of around 18% mean that the government will be taking £200 million extra in VAT on energy bills.

In November, Which? called on the Chancellor, George Osborne, to make an announcement at his Autumn Statement to invest this windfall in energy efficiency programmes to help consumers stay warm this winter.

Autumn Statement result

Unfortunately, the Chancellor rejected our request to give back the VAT for consumers' benefit and yet the Autumn Statement included help for energy-intensive businesses.

This money, if reinvested in the Community Energy Saving Programme (CESP) or Warm Front scheme, would have installed the equivalent of 80,000 energy efficient boilers, or around 400,000 cavity wall insulations.

Richard Lloyd, executive director of Which?, said: 'It's disappointing that the government has not taken this opportunity to support hard-pressed consumers who are facing soaring energy bills this winter.'

Supporters:

Dave Timms, Energy Campaigner, Friends of the Earth:

'Increasing government spending on energy efficiency is a win for people, the planet – and because it generates jobs, the economy too. That's why we agree with Which? that George Osborne should spend the extra money he is getting from VAT on rising energy bills to do more to help people make their homes more energy efficient, cutting their bills forever.'

Andrew Warren, Director of the Association for the Conservation of Energy:

'Recycling the extra £200m in VAT receipts the government has received as a result of increased energy bills into energy efficiency schemes would act as a clear signal from government that they are committed to helping people cope with higher energy costs this winter. We support this Which? ask that the Chancellor takes action that quickly and effectively provides assistance.'

Nick Molho, Head of Energy Policy at WWF UK:

'Improving the energy efficiency of people's homes is the most cost effective way to protect householders from rises in energy prices but the upfront costs and difficult economic times are proving to be important barriers that need to be tackled. WWF supports the call by Which? to reinvest £200 million into energy efficiency into UK homes and believes energy efficiency measures have a key role to play in helping the UK make the urgent transition to a low carbon economy in a way that is as affordable as possible for consumers.'

Jenny Saunders, Chief Executive of National Energy Action:

'With energy prices at unprecedented levels and all projections indicating a continued upward trend there is an evident need for action to tackle the question of affordability. What we need in the short-term is government to divert the additional revenues accruing from VAT on domestic gas and electricity to fund energy efficiency programmes for low-income households.'

Dr Alan Whitehead MP, member of the Energy and Climate Change Select Committee:

'The reduction in funding for energy efficiency programmes prior to the introduction of the Green Deal will create a serious gap in support for all those, like local authorities, who are working hard to get to grips with making homes more energy efficient and providing savings on fuel bills for those who can least afford them. Recycling additional VAT receipts for rising energy bills into supporting local authorities and others taking action on energy efficiency makes absolute sense and needs to by put into action as soon as possible.'

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