A surge in gas prices fuelled by the resumption of the Iran war will cancel out any household savings provided by Andy Burnham’s promise this week to remove VAT from electricity bills, experts have warned.
The wholesale price for gas in Europe has surged by nearly 50 per cent in the past month after the outbreak of fresh hostilities between Washington and Tehran coincided with concerns over winter supplies and increased demand for gas-produced electricity during the summer heat.
The newly-installed prime minister earlier this week put a pledge to reduce the VAT on domestic electricity bills from five per cent to zero at the centre of a campaign to offer voters immediate and tangible help with the cost of living.
Shorts
According to Treasury figures, the reduction, which comes into force in October but is currently only funded until next April, will save households £45 a year if made permanent.
