EU referendum: Boris Johnson and Michael Gove claim Brexit would allow UK to scrap VAT on energy bills

George Osborne rubbishes claims as more "fantasy economics" from Vote Leave

Oliver Wright
Political Editor
Wednesday 01 June 2016 09:56 BST
Gove makes Brexit VAT claim

Boris Johnson and Michael Gove today claimed that the government would be able to scrap VAT on household energy bills if Britain leaves the EU.

Having previously pledged to spend Britain’s annual EU contribution on "our priorities" like the NHS, Vote Leave campaigners today argued that leaving the EU will allow ministers to bin the "unfair and damaging" £2 billion a year tax on gas and electricity prices.

Writing in the Sun, Mr Gove and Mr Johnson promised that "fuel bills will be lower for everyone".

EU Referendum: Latest Poll

But the pledge has elicited scorn from those in favour of remaining in the EU.

"More fantasy economics from Vote Leave: leaving the EU would lead to a smaller economy, a hole in public finances and higher taxes - like higher VAT," George Osborne said.

Currently, VAT of five per cent adds over £60 to domestic dual-fuel bills.

The Tories introduced VAT on energy bills in 1993, six months after "Black Wednesday" when Britain crashed out of the European ERM currency union.

They claim the £2 billion tax cut can be funded out of the £11 billion a year saved from Britain’s contributions to the European Commission.

In the letter the two Tory cabinet ministers state: "We believe working people will be better off if we leave the EU.

"The NHS will be stronger, class sizes smaller, and taxes lower.

"We’ll have more money to spend on our priorities, wages will be higher and fuel bills will be lower.

"Leaving the EU is a great opportunity for us to take back control of our borders, our economy and our democracy."

Separately, Chris Grayling, another cabinet minister in favour of Brexit, will today claim that Brussels is planning to unleash a massive new power grab over key aspects of life if voters choose to remain in the EU.

Mr Grayling will use a speech to say Eurocrats are currently on their "best behaviour" but are preparing to move "full steam ahead" with a string of controversial measures unless we cut ties on June 23.

Meanwhile a leaked memo from the Remain camp, Britain Stronger in Europe, found that Labour supporters were "uniformly uncertain" about the party's position on Europe.

That finding, which came from focus group research carried out by the campaign was corroborated by a YouGov poll for the Times, which found that 45 per cent of the party's voters think Labour either backs Brexit or is split on the issue.

What to believe about the EU referendum

A source in the Remain campaign said it was crucial that Labour politicians stepped up their efforts.

"Labour voters are pivotal in this referendum. That’s why we need a lot of Labour voices because they are better message carriers."

Several Labour MPs said local activists had "canvassing fatigue" after the recent round of local elections, but that they expected a big effort in the final stretch of the campaign.

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