Reform pledges to scrap VAT and green levies on energy bills

Reform UK has promised to scrap VAT and green levies on household energy bills if the party wins power.

It said the move would save the average family £200 a year.

There has been a renewed focus on energy costs since the outbreak of the war in Iran, with fears a sustained rise in the price of oil will lead to a surge into household bills.

The government has already announced that from April some levies will be scrapped or funded from general taxation, leading to a fall in energy costs for a typical household. However, bills could rise again in July when the cap on energy bills is reset.

Reform is launching a prize draw to promote its announcement, with the party promising to pay the energy bills of the winner and their entire street.

A party spokesman said the competition did not breach electoral law.

"If people think there is anything improper in this, they should report us. They won't because there isn't," he said.

At a rally in London, Farage is expected to say: "Labour and the Conservatives have pursued a net zero agenda that has only led to skyrocketing energy bills for working people."

Reform's Treasury spokesperson, Robert Jenrick, will say: "It's outrageous that as people face soaring bills, the chancellor is slapping £200 worth of levies and taxes on the price of energy."

VAT is currently set at 5% on household energy bills. Reform said scrapping the levy would save the average household £78 a year based on current prices but if prices increased the savings would be higher.

Reform said it would also remove the Renewables Obligation levy - which helps fund renewable energy projects - in full from household energy bills.

In her Budget last year, Chancellor Rachel Reeves said the government would fund 75% of the scheme until 2028-29, rather than adding this cost to energy bills.

The Treasury estimated the levy added £117 to the average household energy bill in 2025/26.

Reform has also promised to scrap another green levy - Carbon Price Support - which it said would save the average household £15 a year.

The party said the policies would eventually be cost neutral as a Reform government would be terminating and unwinding subsidies for renewables.

However, in the short term it said the package would be funded by a 7.5% reduction in the budgets of unprotected quangos, which it said would save £2.5bn a year in 2029/30.

Quangos - or arm's length bodies - are organisations such as regulators, cultural institutions and advisory bodies which are funded by taxpayers but not directly controlled from Whitehall.

Reform said the party was conducting an audit of quangos to decide which ones should be abolished, returned to central government or retained in their current form.