My Covid reality today is that I have received a cold weather payment - the second so far this year. I'm glad that we receive them as I have to keep the temperature in my home a constant level otherwise I suffer painful flare ups with my neurological condition. I also receive the annual warm home discount of £140 off the price of my electricity usage.
But when you realise we pay Value Added Tax (VAT) of 5% on gas, electric and utilities, my thought immediately turn to this -why do we have to pay VAT at all? Reading up about it, it was introduced in 1973 when the UK joined the European Economic Community (EEC, later the European Union - yes Ironic I know given Brexit) and is basically a price for consumption of goods and services of which utilities are one. Initially set at 10% - the ration of VAT has fluctuated with the times - at one point it was 25% under the then Labour Government in 1974 until being reduced.
Obviously, it theoretically can be used as a control for overconsumption - the higher the VAT the less you "should" consume. But it makes no sense to me to charge for a utility which everyone needs - keeping hydrated and warm. These are essential utilities, not luxuries, for which no one, particularly those in poverty should be charged VAT.
So here's something radical. Why not scrap VAT on utilities altogether? Then folk wouldn't need cold weather payments and warm home discounts. Used the money saved for ensuring, firstly, that folk have a place to call home then use the money saved to ensure homes meet energy efficiency targets etc. But then, to quote John Lennon - "They might say I'm a dreamer...but [I bet} I'm not the only one..."
