Boris Johnson rejects calls for VAT cut to ease energy crisis - but emergency fund could be on way

Emergency support could be rolled out for people struggling to pay their fuel bills within weeks – despite Boris Johnson slamming the opposition MPs in parliament over their proposals for rapidly worsening energy crisis.

The prime minister spoke angrily about Labour’s “bare-faced cheek” to push the idea of scrapping VAT from domestic fuel bills.

But reports from Sky News suggest the government has conceded to more funds being needed to help people in poverty stay afloat amid rising fuel prices, with an emergency package expected soon.

Angela Rayner, deputy Labour leader – who stepped up to grill Johnson at PMQs on Wednesday after Keir Starmer tested positive for Covid-19 – reminded the prime minister he had pledged to cut VAT as part of his campaign to leave the EU.

But Johnson fired back, citing Rayner’s opposition to Brexit – because cutting VAT is only possible as a result of it.

“She campaigned to remain in the EU didn’t she?” he said.

“They now have the bare-faced cheek to come to the Commons and say they want to cut VAT for fuel.”

The prime minister dismissed calls to scrap VAT on Tuesday because it would help “a lot of people who perhaps don’t need the support”.

A group of 20 Tory MPs and former ministers have also backed the plan to ease the financial pressure on families during the energy crisis.

Just days ago Resolution Foundation analysts warned 2022 would bring a “cost of living catastrophe” as fuel bills and taxes soar.

Ofgem is expected to increase the energy price cap by £500 per year this April, which would likely be combined with a further £100 rise to recoup costs linked to recently-folded energy providers, meaning the average energy bill could rise by £600 per year.

The hiked charges will hit low-income families hardest, the Resolution Foundation report added, increasing the share of their income spent on energy from 8.5 to 12 per cent. 

Speaking at PMQs, SNP Westminster leader Ian Blackford asked if Johnson would apologise for “leaving millions of families worse off” and demanded he commit to a financial package which would “reverse his Tory cost of living crisis”.

Many people are “already afraid to even open their heating bills,” Ed Davey, leader of the Liberal Democrats, said in the Commons.

“Does the prime minister accept he could be doing much, much more than he is doing to stop people going hungry and cold this winter?”

But the prime minister said the government was supporting people through an increase in the universal credit taper rate, a minimum wage increase and by helping them into jobs, while citing the winter fuel allowance and pension protections – which experts say are under threat due to ministers scrapping the triple lock.

Martin Lewis earlier warned that, without swift government action, families could see their energy bills increase by “a minimum 50 per cent”.

“We need to look at what we can do now and how we can protect those people who will need to choose between heating and eating,” he added.