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.
