Stuart Anderson MP has criticised Prime Minister Andy Burnham's unfunded removal of VAT from electricity bills, warning that it will not even cover the rise in bills in October and does not support off-grid households.
Stuart Anderson MP said:
“People in South Shropshire are under real pressure from rising energy and fuel costs. Almost nine in ten people who responded to my Energy Costs Survey said they are highly concerned about rising costs. For those who drive for work, that concern is even greater. Labour pledged to cut energy bills by £300, but they have risen by nearly £294. We need immediate relief and a long-term plan that delivers secure, affordable energy for everyone. Cutting VAT on electricity bills is welcome, but the OBR has been clear: the savings to fund it do not exist. That means either taxes or borrowing will have to go up, and families will end up paying either way. With so many homes in South Shropshire off the gas grid, the government must not forget those left exposed to heating oil price spikes. Only the Conservatives have a fully costed plan to help. We will cut household bills by £200 and cut business electricity bills by 20 per cent. This will be paid for by scrapping Labour's old renewable subsidies and getting Britain drilling again in the North Sea, so that we can use our own resources rather than rely on imports from abroad."
In his first announcement as Prime Minister, Andy Burnham announced that VAT will be removed from electricity bills, reducing their cost by £45. However, Stuart has said that energy bills are still set to increase by £44 in October after taking into account the cut. Burnham said that it will be funded by cancelling the Digital ID programme, which was set to cost £1.8 billion over three years. While Stuart has welcomed the cancellation of the programme, he has said details are needed on how the VAT cut will be funded. This is because the Office for Budget Responsibility (OBR) has stated that the savings to fund the VAT cut do not exist in current budgets, meaning either taxes or borrowing will have to increase. Stuart has said that households that rely on heating oil, LPG, or solid fuels for warmth should see a similar reduction on their heating source. In South Shropshire, this represents 53% of properties - equating to 24,117 households who are not connected to the mains gas supply. This average rises even higher in more remote areas like Clun, Craven Arms, and Bishop's Castle. These households are not protected by the Energy Price Cap. Following the invasion of Ukraine, the previous government supported off-grid households with a payment from the government, known as 'Alternative Fuel Payments.' In August 2024, Stuart urged Ministers to continue the Scheme. However, Miatta Fahnbulleh, who has since been appointed as Energy Secretary, said the scheme had been fully closed with no plans to renew it.
Stuart is also concerned that energy bills have repeatedly risen under Labour in government. Despite their election pledge to cut energy bills by £300, they have risen by £294. The Energy Price Cap for July to September 2024 was £1,568 compared to £1,862 for July to September 2026, an increase of £294. Cornwall Insight has forecast that the Energy Price Cap will increase to £1,700 in October. In contrast, the Conservative Party’s Cheap Power Plan would cut energy bills by £200. The Conservatives would take VAT off energy bills for households to cut the average electricity bill by £94 for the next three years, axe the Carbon Tax (UK ETS and Carbon Price Support) to cut the average electricity bill by £75, scrap Ed Miliband's old renewable subsidies (Renewable Obligation levy) to cut electricity bills by £22, and get Britain drilling again in the North Sea and use extra tax revenue to ease cost of living pressures.
Stuart’s Energy Costs Survey found that concern about increased energy costs is widespread, with 89% scoring their level of concern at a 4 or 5 out of 5. Three quarters of respondents, 74%, selected the maximum level of concern at 5 out of 5. The data also indicates that those who rely on driving for their income report even higher levels of concern than other respondents. Respondents were asked which energy policies they would support. 76% backed reversing the planned 5p fuel duty increase, while 75% supported abolishing VAT on household energy bills for three years. 70% said they supported maximising North Sea oil and gas extraction and ending the ban on new licences. Support for building more renewable energy capacity stood at 48%. In free-text responses, the most frequently mentioned issues were the cost of living, fuel, energy bills, heating costs and taxation. The survey also found support for both increased domestic oil and gas production and additional renewable energy capacity. This suggests many respondents favour a mixed energy strategy rather than seeing these options as mutually exclusive.
