Critics believe cut would mostly benefit better-off people with larger homes and increase carbon emissions
Proposals being considered by Rachel Reeves to cut tax on electricity bills will backfire, experts have warned, resulting in a giveaway to richer homeowners and undermining the UK’s climate commitments.
The chancellor is understood to be looking at plans to eliminate the 5% VAT charge on electricity bills as a fast and simple way to reduce bills for consumers and ease the cost of living pressures that have aided the rise of Reform UK.
However, a host of experts have said such a move would disproportionately benefit better-off people with larger homes, would almost certainly result in higher carbon emissions and could end up being underappreciated by cash-strapped voters.
Tim Leunig, a former government adviser and visiting professor at the London School of Economics, said: “This is a terrible idea. Most of the benefit would go to people in larger houses with larger than average electricity bills.”
