Remove VAT from energy bills for three years, Tories urge. 2 days ago. Becky MortonPolitical reporter. Leon Neal/ Getty Images. The Conservatives have called on the government to remove VAT from household energy bills for the next three years to help ease the cost of living amid the war in the Middle East.. The party said its proposals would be funded by scrapping a number of renewable energy schemes and green levies.. The government has already announced that from April some levies will be scrapped or funded from general taxation, leading to a fall in energy costs. However, bills are likely to rise again in July when the cap on bills is reset.. There has been a renewed focus on energy costs since the outbreak of the war in Iran, with fears a sustained rise in the price of oil may lead to a surge in household bills.. The Tories said removing VAT from energy bills – which is currently set at 5% – would save the average household £94 a year based on forecasts for energy costs from July.. The party said the move would provide the immediate security of lower bills while domestic oil and gas production was ramped up, and would be funded by scrapping various green energy schemes, including heat pump subsidies.. The Tories added that increasing drilling in the North Sea would generate more tax revenue which could be used to ease the cost of living.. The party has already promised to scrap taxes on fossil fuels used to generate electricity that were put in place to deliver a carbon pricing system in the UK.. It has also previously said it would cut renewable energy subsidies by ending a regime of 20-year green energy certificates, originally introduced by Labour Energy Secretary Ed Miliband, which is currently due to continue until 2037.. In her Budget last year, Chancellor Rachel Reeves said the government would fund 75% of this Renewable Obligation scheme until 2028-29, rather than adding this cost to household energy bills.. However, the Tories said they would scrap it entirely for businesses as well as households.. The party said the package would cut energy bills by £200 a year for the average household.. The Tories have also called for the government to maximise domestic oil and gas production in the North Sea, and end the windfall tax on oil and gas companies.. Labour has banned licences for new oil and gas fields in the North Sea but has said oil and gas will continue to be part of the UK’s energy mix in the coming years.. Labour’s Exchequer Secretary to the Treasury Dan Tomlinson said the “central foundation” of the Tory energy plan – to maximise North Sea drilling – “won’t bring bills down”.. “Now [Conservative leader Kemi Badenoch] says the Tories would scrap the windfall tax which is helping tackle the cost of living,” he said.. Reform UK, which has already promised to scrap VAT and green levies on household energy bills, accused the Conservatives of “copying our policies”.. The party’s Treasury spokesman Robert Jenrick said the Tories had
