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George Osborne won’t give back energy VAT

Autumn Statement disappoints energy customers

George Osborne

The Chancellor’s Autumn Statement included help for energy-intensive businesses, but Which?’s request – that the Chancellor give back the VAT gained from energy price rises – has been rejected. 

Since energy price rises kicked in, the Treasury has received around £200m in VAT revenue. Customers currently pay 5% VAT on their energy bills. 

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.’

Struggling in fuel poverty

Energy-intensive businesses have been allocated £250m. Richard Lloyd said: ‘Many people who are struggling in fuel poverty will be angry that the government is not giving domestic customers similar support.’

Which? wrote a joint letter, signed by nine organisations, asking the Chancellor to reinvest this £200m revenue in energy efficiency schemes, such as Warm Front and the Community Energy Saving Programme (CESP).

80,000 energy efficient boilers

The £200m sum would have accounted for the installation of 80,000 energy efficient boilers or around 400,000 cavity wall insulations. By giving the VAT back, the government would have made a big difference to the lives of thousands of consumers this winter. 

Nick Molho, head of energy policy at WWF UK, said: ‘Improving the energy efficiency of people’s homes is the most cost effective way to protect householders from rises in energy prices.’

He added: ‘The upfront costs and difficult economic times are proving to be important barriers that need to be tackled.’

Affordable Energy Campaign

After steep price increases, many consumers are struggling to heat their homes this winter. Which? is campaigning for more affordable energy for everyone.

We’re tackling confusing energy tariffs, giving advice for people on how to make their homes more energy efficient, and urging government and industry to do more to protect struggling consumers this winter. 

More on this…

  • Find out more about the Which? Affordable Energy Campaign
  • Get advice on how to save money with an energy efficient home
  • Use Which? Switch to check that you are on the cheapest energy tariff 
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