The Tory leader says more must be done to protect households from energy price shocks
Kemi Badenoch has vowed to axe VAT on energy bills to save families £200 a year. It is at the heart of flagship plans to shield British households from the raging crisis in the Middle East.
The Tory leader also wants to expand North Sea drilling and scrap Labour’s “crazy” green taxes to help struggling households. Mrs Badenoch’s demands come as Iran’s blockade of the Strait of Hormuz has driven oil prices sharply higher.
Iranian-backed Houthi rebels in Yemen are now threatening to choke off a second major oil shipping route – known as the “Gate of Tears” in Arabic – to the Red Sea, worsening the situation.
The Conservative leader will visit an oil rig off Aberdeen today (Mon) to launch her new ‘Cheap Power Plan’ and is urging the Government to act on it immediately.
She said last night: “I know families and business owners across Britain will be very worried about how the global energy crisis will impact them.
“That’s why I find it appalling that Labour’s solution is to tax working people to fund a bailout for those on benefits.
“By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our Cheap Power Plan would reduce bills by £200 for everyone.”
Her appeal comes as Sir Keir Starmer is due to hold emergency Downing Street talks on Monday about finding a solution to the impact of the Middle East crisis.
He will be joined by senior leaders from the energy, shipping, financial and insurance sectors as well as Government officials and leading military figures.
The Government has so far offered only targeted support to help people most in need, while the energy price cap is due to end in June.
Mrs Badenoch’s flagship plan includes removing VAT from household energy bills for the next 3 years.
She says this will provide immediate relief for consumers, with an average annual saving of £94 per household.
It will be funded by scrapping various taxpayer-funded net zero schemes, including Ed Miliband’s GB Energy, heat pump subsidies, and abolishing the Renewable Obligation subsidies currently being funded through general taxation.
Increased oil and gas production in the North Sea will generate billions of pounds in tax revenue, which can be used to reduce the tax burden and ease the cost of living, the Tory party insists.
“We are calling on the Labour Government to introduce our plan immediately, putting the British public first as prices rise and consumers pay the price for Starmer, Reeves and Miliband’s recklessness,” Mrs Badenoch, the MP for North West Essex, said.
Axing Labour’s Carbon Tax – which makes up around a third of the wholesale price of electricity and was designed to drive coal off the system – will cut bills by around £75, the Tory leader says.
Scrapping Mr Miliband’s old wind subsidies – the Renewable Obligation levy – would save a further £22.
Taken together, this amounts to almost £200 a year.
Mrs Badenoch says fracking isn’t part of her plan, telling Times Radio that it is for local communities to decide.
Labour promised to cut household energy bills by £300 in its 2024 election manifesto, but bills have risen by £73 since it took office.
Shadow Energy Secretary Claire Coutinho said: “Labour promised to cut energy bills by £300, but they are still higher than when they took office.
“Instead, Ed Miliband is blocking drilling in the North Sea during an energy crisis, and Rachel Reeves is hiking taxes on working families to pay the energy bills of those on benefits.
“The Conservatives would use extra tax revenue from our plan to Get Britain Drilling in the North Sea to cut taxes and ease the cost of living. Our Cheap Power Plan would scrap VAT on energy bills and cut bills by £200 for every family.”
She added: “Ed Miliband is taxing industry into the ground and making everyone poorer through higher bills. We have to put cheap energy first.”
But Tessa Khan, executive director of campaign group Uplift, said the Conservatives’ plan would do nothing to lower bills.
Pointing to research suggesting hundreds of North Sea licences granted under the previous government had produced just 36 days’ worth of gas, Ms Khan said Mrs Badenoch was “peddling a dangerous fantasy”.
Dan Tomlinson, Exchequer Secretary to the Treasury, said: “Kemi Badenoch has admitted the central foundation of her energy plan won’t bring bills down. Now she says the Tories would scrap the windfall tax, which is helping tackle the cost of living.
“From trying to plunge our troops headfirst into war without a plan, to her complete mess of an energy policy, Badenoch is proving time and again that she’s completely out of her depth.
“Energy bills are coming down this week for families thanks to the actions of this Labour Government – action that was opposed by the Tories and Reform. While the Tories and Reform chase headlines, this Labour Government will remain focused on easing the cost of living for families across Britain.”
Senior representatives from Shell, BP, Centrica, Equinor, Maersk, HSBC, Goldman Sachs and Lloyd’s of London will attend the roundtable with Sir Keir.
