In a brave move, the Overseas Development Institute – which bills itself as the UK’s leading international development think tank – has called for George Osborne to use his Autumn Statement to announce plans to quadruple the rate of VAT on household energy bills.
Despite sustained pressure for bills to be lowered to address a ‘cost of living’ crisis, ODI believes the Chancellor should raise VAT from 5% to the standard rate of 20%, bringing more than £4 billion into Treasury coffers.
According to an ODI spokesperson:
It is unconscionable that a young man should have to pay 20% to buy a copy of Grand Theft Auto 5 in order to wind down after a hard day in the City by slaughtering virtual representations of old ladies, when real life old people are able to pay only 5% to heat their homes. This ‘warmth subsidy’ must end now.
If successful, ODI plans to campaign for the abolition of the Winter Fuel Allowance, saving another couple of billion. It will then call for a flat rate of VAT on all products, ending subsidies for reading and eating (both books and food are zero-rated).
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