Sunak slammed for ‘screeching U-turn’ as ex-Chancellor vows to scrap VAT on energy bills

Sunak's inflation arguments 'are not the right ones' says Clarke

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The ex-Chancellor revealed he would axe VAT on energy bills for a year if he wins the race to replace Boris Johnson as Conservative Party leader and Prime Minister. The “temporary and targeted” measures are set to help penny-pinching Brits save £160 on the average household bill as energy prices continue to soar into the winter. The decision has been criticised with Mr Sunak accused of a “screeching U-turn” and comes as the Richmond MP continues to lag behind Liz Truss.

The ex-Chancellor currently trails the Foreign Secretary, who has been accused of promising to implement tax cuts which would cost £40billion, by 38 percent to 62 percent among card-carrying Conservative members.

In another blow to Mr Sunak, YouGov also claimed Tory members thought Ms Truss came out on top during the first head-to-head leadership debate on the BBC on Monday.

However, a source close to the Truss campaign blasted the ex-Chancellor over his VAT axing announcement.

According to the Telegraph, they said: “It’s good that Rishi has finally woken up and decided to offer something to people struggling with the rising cost of living.

“However, this feels like a screeching U-turn from someone who has spent the last few weeks of the leadership campaign branding everyone else’s tax cuts immoral and fairytales.”

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Ms Truss’ allies also point out how Mr Sunak claimed in February such a move, which is considered to be a Brexit dividend, would “disproportionately benefit wealthier households”.

Team Sunak denied there had been a U-turn and claimed the tax cut was “a tool that was always in our arsenal”.

A source told the Telegraph: “We didn’t use it back in spring because the size of the jump of the bills was way bigger, and it wouldn’t have touched the sides.

“This is a response to latest estimates that suggest the rise might be £100-200 more than anticipated.”

The VAT cut, which would be in place for a year from October, would cost the Treasury around £4.3billion.

Announcing his new policy on Tuesday, Mr Sunak said: “Tackling inflation and getting people the support they need to help with the cost of living is critical.

“That’s why, with the price cap expected to rise above £3,000 in October, I will move immediately to scrap VAT on everyone’s domestic energy bills for the next year, saving the average household £160.

“This temporary and targeted tax cut will get people the support they need whilst also – critically – bearing down on price pressures.”

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The Brexit-backing MP for Richmond added: “As Chancellor, I knocked £400 off everyone’s energy bill and provided support of £1,200 for the most vulnerable households.

“This additional VAT cut will help deal with the current emergency.

“I will also begin undertaking major supply side reforms targeted at the rising cost pressures families are facing.

“That means urgently getting more people off welfare and into work and tackling the supply chain crunch.”

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