Think Tank Urges VAT Cut On Heating Oil Amid Rural Fuel Poverty Concerns

A tractor cultivates the ground for rapeseed oil crops at the Westons Farm, in Itchingfield, south England, on March 28, 2022. Daniel Leal/AFP via Getty Images

A think tank has called on the government to slash VAT on domestic heating oil, while raising the alarm about “elevated rates of fuel poverty” in rural communities, ahead of the chancellor’s Autumn Statement.

The Countryside Alliance, which advocates for rural concerns, said in a briefing note on Tuesday that rural households faced a staggering 15.9 percent fuel poverty rate in 2022, with a £956 fuel poverty gap, which is the additional income needed to bring a household to the point of not being fuel poor.

The briefing, which was released alongside Alba Party MP Kenny MacAskill, underscores the severe impact of the cost of living crisis on rural communities, revealing a 45 percent rise in anxiety among respondents.

The group has urged the chancellor to wield post-Brexit powers to slash VAT on domestic heating oil to zero and cut the 20 percent VAT on rural businesses.

David Bean, Parliament and government relations manager at the Countryside Alliance, warned of “extra costs” associated with rural living and laid out five measures that the think tank would like to see enacted in the Autumn Statement to help those struggling.

Rural Communities Facing a ‘Premium’

“There’s growing recognition that people living in the countryside face a rural premium: extra costs of living based on living in rural areas. We’re particularly concerned about elevated rates of fuel poverty in the countryside,” Mr. Bean told The Epoch Times.

“We are calling on the chancellor, in his Autumn Statement, to introduce five measures that will ease the burdens rural people face: cutting VAT on domestic heating oil to zero, keeping fuel duty frozen at the current level, funding ambitious rollouts of rural broadband and the infrastructure needed for electric vehicle adoption, and funding councils to deal with the growing problems of littering and fly-tipping.”

OFTEC, a prominent trade organisation for the heating and cooking industries, has also urged the chancellor to address rural concerns by aligning fuel duties for HVO, a renewable liquid fuel, with traditional heating oil.

This move, with no proposed cost to the government, may lower consumer costs and reduce emissions by 88 percent. OFTEC claims that this could be achieved without requiring Treasury subsidies.

Howard Cox of FairFuel UK, a pressure group dedicated to opposing new taxes, city entry bans for drivers, and potential additional costs on petrol and diesel imposed by the Treasury, approved of the announcement from the Countryside Alliance.

Mr. Cox said, “This disappearing into oblivion government are still focused on urban economics and have always disregarded the cost of transport to non city dwellers.”

Calls for Fuel Price Monitor

FairFuel UK advocates for the establishment of an independent pump price monitoring body called “PumpWatch.”

The campaign, which has been backed by dozens of MPs, seeks to introduce a regulatory body dedicated to monitoring and ensuring transparency in fuel prices at the pump.

Mr. Cox said: “Cutting fuel duty and implementing a PumpWatch with teeth would put the UK onto a journey of prosperity. Sadly the myopic chancellor and branch manager [Prime Minister Rishi] Sunak do not have the sage-like fiscal wisdom to ride that economic highway.”

Tess Wheldon, a researcher for rural policy at the socially conservative think tank Orthodox Conservatives Group, added that governments had been favouring policies that benefited an “urban elite.”

Ms. Wheldon said, “The higher financial burden faced by members of rural communities is the direct result of successive governments wilfully neglecting their needs in favour of policies that benefit an urban elite.”

“Rural farming communities form the backbone of Britain, with farmers, gamekeepers, and other rural professions playing a key role, both in food security and in maintaining the traditional British countryside for future generations,” she said.

“It is only fair that the government supports them.”

With pressure to reduce tax and ease the cost of living crisis coming from within his own party, Chancellor Jeremy Hunt has committed to refrain from taking any actions in Wednesday’s Autumn Statement that could exacerbate inflation.

The Treasury has not responded to a request for comment.