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Daily Mirror
Daily Mirror
Politics
Dave Burke

Boris Johnson takes swipe at Rishi Sunak over energy bill VAT U-turn

Boris Johnson had a dig at Rishi Sunak this morning following the former Chancellor's announcement that he would cut VAT on energy bills.

Speaking at the Commonwealth Business Forum in Birmingham, the outgoing PM said the move would be "easier than we thought".

He made the remark after Mr Sunak was accused of a screeching u-turn over VAT, having previously opposed the move while in Cabinet.

Addressing the race to succeed him, Mr Johnson told the audience: "We come now to the next stage in the great relay race of politics.

"I didn't think it was meant to be a relay race, by the way, when I started.

"I can assure you that the baton is going to be passed seamlessly and invisibly to the hand of somebody else."

Rishi Sunak has said he intends to cut VAT on energy bills to deal with the cost of living crisis (REUTERS)

He added: "I'll give you this assurance, they will continue with the same programme, cutting taxes, simplifying regulation as much as possible, taking advantage of all our new regulatory freedoms, getting rid of every encumbrance from solvency to MiFID to VAT on fuel - turns out to be easier than we thought."

Mr Johnson also lashed out at "spoilsport" rail unions who he said could cause "pointless" disruption to the Commonwealth Games.

He said: "The nails of the organisers are going to be chewed down to the quick because this is the moment of maximum dread.

"Will the transport system hold up, will the RMT spoilsports make things painfully, pointlessly, pointlessly difficult?"

The Prime Minister, who is due to leave office on September 6 and is said to be trying to identify a safe seat for the next General Election, defended the cost of the Commonwealth Games.

Boris Johnson appeared to lash out at Rishi Sunak over his proposed VAT cut (PA)

The PM said he is "supremely confident" there will be a legacy from the £778 million of taxpayers' money that has gone into the event.

He stated: "It's only a few hours until the Commonwealth Games begin. The biggest sporting event ever in the West Midlands and you can feel the excitement here in this mighty city of Birmingham because the athletes are already here in their thousands, from 56 countries, 72 nations and territories around the world."

He added: "Already you can hear the voices on some parts of the media of those who doubt that the whole thing will be worth it.

"And people say, can we afford it? Should we have done it with the pressure on the cost of living? Will there be a legacy from the £778 million of taxpayers money that has gone into these games?

"And so right now, I want you to know I am here to tell you that I am supremely confident that the answer to that question is yes. A thousand times, yes. I say so because I remember, almost exactly 10 years ago, an identical moment of nerves just before the beginning of the London 2012 games."

The PM who was London mayor at the time of the 2012 Summer Olympics in the city, insisted "those Games went on to be a massive global success that continues even to this day to deliver thousands of jobs, growth, regeneration across much of London and indeed beyond".

The Prime Minister is due to leave office on September 6 (PA)

It comes as Mr Sunak and Liz Truss slug it out in a bitter contest to become the next Tory leader.

Yesterday the Institute for Fiscal Studies (IFS) cast doubt on Mr Sunak's VAT plan - saying the biggest benefactors would be high users rather than those struggling to pay.

The IFS said once introduced it would be tricky politically to bring VAT back - but said if it became permanent it would move the UK in "exactly the wrong direction".

It is estimated that scrapping VAT on energy bills would save households around £156 a year, with the cost to the exchequer estimated at around £4.3 billion.

While this would be "bearable" in the short term, it could encourage more energy use if brought in over a longer period, an expert said.

Stuart Adam, a Senior Economist at the IFS, said: “By providing more support to those who use more energy, it would be well targeted at those who face the biggest rise in their energy bills, but not at those – the poorest – who are least able to cope with the rise in costs.

Rishi Sunak and Liz Truss are slugging it out to become the next Tory leader (PA)

"If it were genuinely temporary, the fiscal and environmental costs of the policy would be bearable.

"The biggest risk with the policy is that it would prove politically difficult to restore VAT on energy bills at the end of the 12 months.

"As a permanent policy, removing VAT on energy bills would be a move in exactly the wrong direction: distorting households’ choices towards more energy use, making it harder to meet the UK’s ‘net zero’ targets and meaning that any reduction in emissions happened in a way that was more costly overall to households than it need be."

In January a Labour motion to force a cut in VAT on energy bills was voted down by Tories, with Boris Johnson previously branding the move a "blunt instrument".

Mr Sunak said: "Tackling inflation and getting people the support they need to help with the cost of living is critical.

"That’s why, with the price cap expected to rise above £3,000 in October, I will move immediately to scrap VAT on everyone’s domestic energy bills for the next year, saving the average household £160.

"This temporary and targeted tax cut will get people the support they need whilst also – critically – bearing down on price pressures."

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