Cost-of-living crisis: SNP MSP calls for VAT reduction to energy bills
An SNP MSP has called on the UK Government to introduce a reduction of VAT on energy bills to help those struggling to pay due to the cost-of-living crisis.
Christina McKelvie said the £200 ‘loan’ from the Treasury should be delivered as a grant instead and said further interventions from the Treasury should follow.
The Treasury said its support was worth £20 billion and the £200 on energy bills would allow people to spread the cost of the high bills being felt today.
The MSP for Hamilton, Larkhall and Stonehouse helped facilitate the launch of the ‘quick credit voucher’ in her constituency, helping people referred to foodbanks meet the cost of energy through a non-repayable credit voucher.
She said: “Households across Scotland have been struggling with energy prices before this new hike from Ofgem has even been implemented. Working with Scottish Power and the Fuel Bank Foundation I have seen first-hand the impact fuel poverty has in my constituency, particularly on the most vulnerable households.
“If [Chancellor] Rishi Sunak had seen these schemes in operation, then he might understand one of the key principles of it – making people pay back emergency funding simply does not help lift them out of poverty.
“Receiving £200 now which will have to be paid back while households are being squeezed through energy hikes, a rise in national insurance and general cost-of-living crisis is little help at all.”
Ms McKelvie also called on the Chancellor to implement a reduction of VAT on energy bills, something she said would be a “lifebelt for struggling families” and was a promised “benefit of Brexit”.
A spokesperson for the Treasury said the Scottish Government had the biggest funding settlement since the beginning of devolution to help support struggling families.
They said: “We recognise the pressures people are facing with the cost of living and are providing support worth around £20bn across the UK this financial year and next to help.
“The energy bills’ reduction is not a loan to households or suppliers and will help people manage the increase in energy bills by spreading the increased costs over a few years, so they are more manageable and we have provided £290 million for the Scottish Government through the Barnett formula as a result of the council tax rebate scheme."
Want to hear more from The Scotsman's politics team? Check out the latest episode of our political podcast, The Steamie.
A message from the Editor:
Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.
If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.
Want to join the conversation? Please or to comment on this article.