Rishi Sunak has pledged to waive Value-added Tax (VAT) on fuel bills for a year in an attempt to address the challenges of rising living costs in the country.
In a significant U-turn, former UK Treasury Secretary Rishi Sunak has pledged to waive Value-added Tax (VAT) on fuel bills for a year in an attempt to address the challenges of rising living costs in the country. His statement comes as the race for the country’s leadership heats up between him and his opponent Lizz Truss – the incumbent Foreign Secretary of the UK. During his tenure as the country’s chancellor, Sunak had previously resisted proposals to abolish the 5% VAT rate on domestic fuel due to the rising cost of living.
In February this year, he contended that the removal of VAT on fuel bills would primarily favour wealthier households. Sunak has often emphasized the risks of making empty promises after Truss pledged to provide £30 billion in immediate tax cuts. The former chancellor also argued that he has already taken steps to lessen the impact of the surge in domestic energy bills expected in October. However, despite previously criticising the idea, he proposed a new handout, worth £160 for every household, as he continues to lag behind Truss in polls of Tory members.
Truss campaign supporters term Sunak’s backtracking an ‘act of desperation’
“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,” Sunak stated, The Guardian reported. He further stated that people in the country would receive the assistance they need with this brief and focused tax reduction. However, Sunak’s backtracking was criticised by Truss campaign supporters who termed it as an “act of desperation.” After the two have sparred over taxes several times, a YouGov survey of Tory members revealed that 55% believed Truss was better at dealing with the cost of living, against 34% for Sunak.
UK Prime Minister race
It is significant to mention here that Sunak, who has served as UK’s chancellor in Johnson’s government, topped the final ballot of MPs with 137 votes, followed by Truss with 113 votes on July 20. However, polls have suggested that Sunak is less popular among the Conservative Party whose MPs will cast votes for their preferred candidate in the month of August. Notably, the country is likely to get a new Prime Minister on September 5.