§ Mr. ForthTo ask the Chancellor of the Exchequer what estimate the Government have made of the effects in percentage terms on average domestic fuel bills of(a) the introduction of competition into the domestic gas market, (b) the reduction in VAT on domestic fuel and (c) the windfall tax, over the period since each measure was introduced. [84660]
§ Ms HewittAccording to latest DTI figures, the combined impact of competition and regulation has reduced the average domestic gas bill by around 16.5 per cent. in 137W real terms since competition was first introduced into the domestic gas market in 1996.
Assuming no demand effects, the reduction in the VAT rate on domestic fuel from 8 per cent. to 5 per cent. in September 1997 reduced the average domestic fuel bill by just under 3 per cent.
In his Budget speech in July 1997, the Chancellor said that the windfall tax could be paid without any impact on prices. It is the Government's view that domestic fuel bills have not been affected by the windfall tax. The energy regulators have publicly supported this view.