North Cornwall MP Ben Maguire says VAT cut ‘won’t cut it’

Households in North Cornwall are due to save around £45 a year when the government zero-rates VAT on domestic electricity this autumn. Their MP says that barely touches the sides.

Ben Maguire, the Liberal Democrat MP for North Cornwall, has today said Andy Burnham’s plan to strip VAT from domestic electricity bills in October does not go far enough for households already stretched by the cost of living.

What is on the table

The government scheme cuts the rate of VAT on household electricity from 5% to 0% from 1 October. On the figures Ben Maguire cites, that works out at a saving of roughly £45 a year.

The Liberal Democrats are pushing an alternative they call the Essential Energy Guarantee. According to the party, it would save the average North Cornwall household £100 a year, more than double the VAT saving, and the poorest 20% of households an average of £140. Every home would get a basic energy allowance set at 50% of average consumption, charged at a discounted rate, to cover essentials like heating, lighting and running medical equipment. Families would receive extra allowances for children, and the most vulnerable, including people with disabilities or on the lowest incomes, would get the discounted rate on all their energy use.

The party says the scheme would be paid for by clawing back £7 billion in what it describes as unexpected windfall profits from monopoly energy network operators.

The rural blind spot Maguire describes

Ben Maguire argues the VAT cut is another example of Labour overlooking rural areas like North Cornwall, and in particular the households that heat their homes with oil and LPG rather than mains gas. Those fuels sit outside the electricity VAT change entirely.

He has previously pressed for wider protections in Parliament, including a three-month zero-rating of VAT on heating oil for all residential homes, alongside a price cap to guard against sudden spikes.

The scale of the problem locally is set out in House of Commons Library data on fuel poverty by constituency. More than 5,600 households in North Cornwall are in fuel poverty, struggling to afford their most basic energy needs.

A question over the funding

The government has said it will pay for the VAT cut by reallocating money from the now-scrapped Digital ID scheme. That has drawn criticism from within Labour’s own ranks. Former minister Darren Jones has argued, in a post on X, that the Digital ID scheme was itself unfunded.

What Maguire said

Commenting, Ben Maguire said: “We need to get money back into the pockets of people here in North Cornwall, but tinkering with VAT on energy bills like this just doesn’t cut it. It’s a drop in the ocean compared to the soaring costs families are facing, especially factoring in the sky-high prices of heating oil and LPG in the wake of Trump’s war in Iran.

“We have real plans for an ‘Essential Energy Guarantee’, which would provide immediate and meaningful relief, ensuring that nobody here in the constituency is forced to choose between heating and eating.

“We may have a new Prime Minister in Number 10, but Labour’s blind spot remains: they just do not understand rural areas of Britain like ours. It’s a scandal that more than 5,600 households in our area worry every day about keeping their homes warm. Once again, these households in our community that rely on heating oil risk being left out in the cold.”