Workers on Tuesday will join forces to force Boris Johnson to waive an additional tax on electricity tariffs, by forcing a parliamentary vote on the issue that reveals Tory’s divisions on how to deal with the crisis.
The UK Prime Minister and Rishi Sunak, chancellor of the exchequer, on Sunday held talks with discuss alternatives to alleviate the pressure on household income, Johnson last week described the VAT move as a “nonsensical tool”.
Sunak officials are considering a single tax on oil and gas companies in the North Sea, which are particularly excited about rising gas prices, to raise about $ 1bn to offset rising mortgage debt.
The Treasury is skeptical of such taxes, fearing that they could stave off revenue, reduce availability and raise oil and gas prices. But a Sunak colleague said: “Right now we are not banning anything.”
Johnson and Sunak are facing pressure to support families due to a lack of funding from Conservative counselors and support newspapers including the Daily Mail, Daily Express and The Sun.
Workers have used the controversy Tuesday to force a House of Commons vote that would allow the opposition party to introduce legislation to reduce VAT on household electricity bills from 5 percent to zero for one year.
Boris Johnson supported the idea during the Brexit referendum in 2016, and in recent days several Conservative MPs have approved a move to zero VAT on domestic electricity.
Ed Miliband, a climate change secretary, said: “The government – and all Tory MPs who have contributed to the reduction of VAT on household electricity bills – should follow through on their promises and vote with Labor for a one-year tax cut.”
The Labor Procedural Plan, if approved, would allow the party to bring a decision to reduce VAT on domestic electricity bills on February 1, a possibility Johnson may seek to close.
Johnson and Sunak have agreed that the cost of living is rising so that the government will not rush to announce measures to reduce the problem. “We need to fix this,” a government expert said.
The crisis could escalate in April as millions of households face an annual rise in electricity prices – currently £ 1,277 but are expected to rise to around $ 2,000 – in line with tax changes that could cost a family $ 600 a year.
But in the meantime, Number 10 will be meeting the demands of the consultants and the media to create a plan.
Sunak has not lifted the VAT cut on household electricity bills, at a cost of £ 2bn, but he and Johnson are concerned that it could benefit all families and not the most important ones.
Developing a plan to get rid of warm houses, which now cost £ 140 each winter up to 2.7m poor families, could be a very straightforward approach. Paying tax for $ 300 to 8.5m families can cost £ 2.5bn.
Workers and the Liberal Democrats are demanding a permanent tax from the oil and gas companies in the North Sea to help pay for the extra household income. Bernard Looney, chief executive of BP, said in November that high energy prices have turned his company into a “money machine”.
Kwasi Kwarteng, the business secretary, expressed in September that he was considering “all options” after the Spanish government imposed a tariff on electricity.
But what has happened in Spain has put the UK staff at a disadvantage, according to officials. Madrid reduced its electricity tariffs after power companies said they were hitting their money on very low electricity systems.
The idea of a UK windfall tax for North Sea manufacturers is not uncommon. Experts point out that successive governments in the past have also changed the taxes that affect the production of the North Sea in order to make more money during oil and gas prices.
Meanwhile, Downing Street has been pushing for the “self-control” of MPs in the hope that the independent governing body will encourage a pay rise of around $ 2,000 until their annual salary of $ 81,932 in April, when the financial crisis arrives. Keir Starmer, Labor leader, said lawmakers should not go up, expected to be around 2.7 percent.