HC Deb 30 June 1994 vol 245 c937
9. Mr. Harvey

To ask the Chancellor of the Exchequer what consideration he has given to introducing measures to reverse the increase in VAT on fuel in April 1995.

The Paymaster General (Sir John Cope)

Parliament considered that matter and legislated last year.

Mr. Harvey

As the Government are committed to reducing taxation when economic circumstances allow, will they give a commitment to the House today that, when that happy day is reached, their first priority will not be to attract headlines by cutting income tax but rather to reduce VAT on domestic fuel?

Sir John Cope

We give no commitments of that sort in advance. In any case, is it not interesting that only a few minutes ago the right hon. Member for Berwick-upon-Tweed (Mr. Beith) was urging caution on my right hon. and learned Friend the Chancellor as regards tax cuts?

Mr. Patrick Thompson

Bearing in mind the generous compensation that has been provided to all pensioners for VAT on fuel, will my right hon. Friend have a word with the Secretary of State for Social Security to ensure that it is presented separately on pension books, because that would help me with my constituency correspondence?

Sir John Cope

I agree with my hon. Friend that the compensation is generous. I will pass on his suggestion to my right hon. Friend the Secretary of State for Social Security.

Mr. Winnick

Does not the Minister understand the tremendous hardship already being caused by the imposition of VAT on domestic fuel? If that is not to be reversed, the Government should at least not impose the further measure in 1996, which will cause untold hardship, despite the Government's claims that those who need help are receiving it. The measure has been a great burden, which helps to explain the Tories' deep unpopularity in the country.

Sir John Cope

I do not quite follow the reference to 1996. Whatever the hon. Gentleman was thinking about, I understand the point that he makes. But he knows as well as anyone else that we do not make comments before the Budget.

Mr. Bill Walker

Will my right hon. Friend remind those European enthusiasts on the Opposition Benches that an energy tax is part of Europe's policy? Will he also remind them that the Government have been elected since 1979 on a policy of diverting direct taxes to indirect taxes, and that VAT is an indirect tax?

Sir John Cope

My hon. Friend is right. The carbon energy tax supported by the Opposition, particularly by the Liberals, would be a severe imposition on ordinary people.