Tuesday 6 March 2012

Finance boss calls for energy tax cut

Finance boss calls for energy tax cut

The boss of finance company Pockit has called on Government to reconsider the current VAT for energy bills. Danny Jatania claims the 5% rate is hitting those in poverty and thinks that scrapping the tax could help millions during the recession.

He said: "By scrapping VAT on energy bills the government could cut the number of households in fuel poverty by 250,000 and help millions more who are struggling to pay their energy bills. With the latest figures on winter deaths painting an alarming picture, now is the time for action.

"Water bills and basic foods are already classed as essential, qualifying them for a zero rate of VAT, and I do not think many people would argue that heating and electricity are also necessities for all households. To see that over 7,000 winter deaths are related to fuel poverty is very distressing and you do not expect to see it in the developed world."

Recent research from Ulster University has argued even more people are dying each winter from fuel poverty. The latest Office of National Statistics figures show that there were 25,700 excess winter deaths in England and Wales in winter 2010 and World Health Organisation research suggests that 30-40% of the excess winter deaths can be attributed to fuel poverty.

Danny Jatania added: "The time has come to redress the balance; it is not acceptable to see energy companies announcing colossal profits while millions struggle to survive winter. The money lost by the Treasury by scrapping VAT could be well over £1bn, but a windfall tax on the huge profits made by the 'Big Six' could help to plug this hole and possibly be reinvested to help homes implement measures such as cavity wall and loft insulation to become more energy efficient."

Written by

Bruna Pinhoni

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