EU Referendum: Vote Leave wants power to axe fuel VAT

2 years ago
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Leading figures in the campaign for Britain to leave the European Union say they want to be able to scrap VAT on fuel to help the poorest households.

Tories Michael Gove and Boris Johnson and Labour’s Gisela Stuart wrote in the Sun that the tax on energy bills cannot be scrapped because of EU rules.

Meanwhile, the Remain campaign is focusing on businesses, saying they will be stronger and safer in the EU.

There is one week left to register to vote in the EU referendum on 23 June.

The Electoral Commission says that, even after recent surges in registrations, many people are still not signed up to vote.

EU referendum: All you need to know
Issues guide: Explore the arguments

In their article, the Vote Leave politicians said they would seek to spend some of the cash saved by quitting the EU on cutting VAT from household gas and electricity bills, a tax imposed by a Conservative government in 1993.
‘Unfair and damaging’

“The least wealthy are hit particularly hard,” they wrote.

“The poorest households spend three times more of their income on household energy bills than the richest households spend. As long as we are in the EU, we are not allowed to cut this tax.

“When we Vote Leave, we will be able to scrap this unfair and damaging tax.

“It isn’t right that unelected bureaucrats in Brussels impose taxes on the poorest and elected British politicians can do nothing.”
Energy and environment

This issue covers energy availability and environmental protections.
Why this issue matters
The debate

The EU is in the process of developing an integrated energy market
There are several EU-wide policies to tackle climate change including the Emissions Trading Scheme
It also legislates on issues such as water quality and air pollution

Leave

EU environmental regulation can be an unnecessary burden on business and push up energy prices
Other European countries would still want to sell their electricity to the UK after Brexit
Most of the UK’s gas imports come from Norway – Britain is not dependent on Russia

Remain

Leaving the EU would see energy bills rise by £500m
Britain’s energy security is stronger as part of the EU because it negotiates as a large bloc
The UK has cleaner water and air, and lower greenhouse gas emissions, thanks to EU action

The BBC’s political correspondent Iain Watson said critics would say as it is ministers and not campaigns that decide how public money is spent, there is no guarantee that a future government would scrap the VAT even with the freedom to do so.

Meanwhile, Business Secretary Sajid Javid will warn of the impact of leaving the UK on SMEs (small and medium-sized enterprises) later.

He will cite Department for Business, Innovation and Skills analysis, estimating that 8% export to the EU and a further 15% are in the supply chains of other businesses that export to the EU.
Image copyright PA
Image caption Business Secretary Sajid Javid will warn of the impact of leaving the UK on SMEs

Britain Stronger in Europe said that amounted to about 1.2m firms.

Mr Javid said: “Britain’s small businesses are stronger, safer and better off in Europe.

“If we leave the EU, small firms are on the front line and that’s a gamble with people’s livelihoods I’m not willing to take.”

But Vote Leave questioned the figures and said business was held back by EU membership.

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