Rachel Reeves’s 5% VAT cut on electricity bills will backfire, experts say

Reeves faces a career-defining budget on 26 November when she will have to explain how she will fill an expected black hole of around £30bn while also trying not to push up living costs. Photograph: Andy Rain/EPA

Proposals being considered by Rachel Reeves to cut tax on electricity bills will backfire, experts have warned, resulting in a giveaway to richer homeowners and undermining the UK’s climate commitments.

The chancellor is understood to be looking at plans to eliminate the 5% VAT charge on electricity bills as a fast and simple way to reduce bills for consumers and ease the cost of living pressures that have aided the rise of Reform UK.