Brecon, Radnor and Cwm Tawe MP David Chadwick has said he UK Government’s decision to remove VAT from household electricity bills “doesn’t cut it” for struggling families.

The Government announced the tax cut as one of new Prime Minister Andy Burnham’s first measures in office, with VAT on domestic electricity bills set to fall from five per cent to zero from October 1.

It is expected to save households around £45 a year and has been funded by cancelling the £1.8 billion Digital ID programme.

But Mr Chadwick said the measure did not go far enough, arguing that many people in rural areas continue to face pressure from rising energy costs.

The Liberal Democrat MP said his party’s proposed Essential Energy Guarantee would provide greater support, saving the average Welsh household around £100 a year.

The scheme would provide every household with a basic energy allowance, equivalent to half of average energy consumption, at a discounted rate. Additional support would be available for families with children and vulnerable households.

The party said their proposals would be funded by recovering £7 billion in unexpected profits from monopoly energy network operators.

The Lib Dems also criticised the Government for “forgetting about rural Britain, and households that rely on heating oil.”

‘Labour’s blind spot remains’

Mr Chadwick said: “We need to get money back into the pockets of people in our communities, but tinkering with VAT on energy bills simply doesn't cut it. It is a drop in the ocean compared to the soaring costs families are facing.

“The Liberal Democrat plans for an Essential Energy Guarantee and calls for a three-month cut to VAT on heating oil would provide immediate and meaningful relief, ensuring that nobody in Mid Wales is forced to choose between heating and eating.

“We may have a new Prime Minister, but Labour’s blind spot remains - they simply do not understand rural Wales.”

According to House of Commons Library data, 17 per cent of households in Powys are living in fuel poverty.

Announcing the VAT cut, Prime Minister Andy Burnham said the move would “put more money in people’s pockets and bring back hope”.

The Government said the measure would provide immediate support before the next energy price cap and would benefit millions of households across the UK.

It said energy bills had increased following Russia’s invasion of Ukraine and the conflict in Iran, adding that action was needed to provide support “now”.

The Government also said suppliers would be expected to pass the VAT reduction on to all customers, including those on fixed tariffs.

‘We’re taking immediate action’

Mr Burnham said: “Westminster has not been working for people for too long, with families struggling with the cost of living.

“That needs to change. I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as Prime Minister.

“We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”