The average UK household spends £1,800 a year on gas and electricity. A five-percentage-point VAT cut, from 5% to 0%, saves roughly £70. That is, as the SNP noted, not enough to buy a tin of Spam, let alone cover a winter’s worth of heating. The proposal, floated by Manchester mayor Andy Burnham and reported by The National Scot, is a political gesture, not an energy policy.
The National Scot reports that the SNP dismissed the plan as “a sticking plaster”, and they are right. But the deeper problem is that neither party is talking about the one thing that would actually cut bills: making homes less wasteful.
What £70 actually buys a homeowner
Seventy pounds is roughly the cost of draught-proofing an entire three-bed semi, sealing skirting boards, letterboxes, and window frames. It is also the annual saving from topping up loft insulation from 100mm to the recommended 270mm. By contrast, a VAT cut does nothing to stop heat leaking through single-glazed windows or uninsulated cavity walls. The Treasury would lose about £1.6bn in revenue, and households would still shiver through January.
Ofgem’s latest data shows that the typical household loses 25% of its heat through the roof and 33% through walls. A one-off VAT cut on bills does not change that. It is a transfer, not an investment.
The real game: EPC ratings and retrofit grants
Homeowners should focus on what actually moves the needle on energy performance certificates (EPC). A home rated D or E costs £500–£1,000 more a year to heat than a C-rated equivalent. The government’s Boiler Upgrade Scheme offers £7,500 towards a heat pump. The Great British Insulation Scheme covers cavity wall and loft insulation for eligible households. These are not sticking plasters; they are structural repairs.
Yet take-up remains low. Only 50,000 heat pump grants were claimed in 2023, against a target of 600,000. The VAT cut debate distracts from the real bottleneck: upfront cost. A heat pump installation runs £7,000–£13,000. Even with the grant, many households cannot bridge that gap. The SNP’s mockery of Burnham’s plan is fair, but their own record on retrofit funding in Scotland is patchy too.
What this misses
The catch is that VAT on energy bills is already only 5%, not the standard 20%. Cutting it to zero yields diminishing returns. Meanwhile, the UK’s housing stock is among the leakiest in Europe. The average German home uses 40% less energy per square metre than the average British one. That is not a tax problem; it is a building problem.
Andy Burnham knows this. His proposal is a bid for headlines, not a serious energy strategy. Homeowners should ignore the political theatre and do what actually works: book an EPC assessment, apply for a grant, and start with the cheapest fix, draught-proofing. It costs less than a tin of Spam and saves more than a VAT cut ever will.
What to do by when
Households on standard variable tariffs can check eligibility for the Great British Insulation Scheme through gov.uk. Applications for the Boiler Upgrade Scheme remain open, but funds are capped per installer. The smart move is to act before winter, book a survey now, not in November. The VAT cut debate will be forgotten by then. Your energy bill will not.
Frequently Asked Questions
Politically yes, practically no. The typical saving of £70 a year is too small to help most households struggling with high energy costs. A far better use of government money would be expanding retrofit grants that cut bills by £300–£500 annually.
Draught-proofing costs £50–£100 for a typical home and can save up to £80 a year. Loft insulation top-ups cost around £300 and save £100–£150 annually. Both pay for themselves within two years and improve your EPC rating.
