HC Deb 10 July 1997 vol 297 cc1061-2
8. Mr. Hutton

To ask the Chancellor of the Exchequer if he will make a statement on his plans to reduce value added tax on domestic fuel. [6184]

Dawn Primarolo

My right hon. Friend announced in the Budget last week that VAT on domestic fuel is to he cut to 5 per cent.

Mr. Hutton

I am grateful to my hon. Friend for that reply. Can she confirm that millions of pensioners and people on low and fixed incomes will benefit directly as a result of the reduction in VAT on gas and electricity, which, together with the other changes in the Budget last week, will lead to significant reductions in fuel bills later this year? Has that not served to emphasise one of the main differences between the Government and the Opposition? The latter broke their promises on VAT. We keep ours.

Dawn Primarolo

I can confirm that the average household will be more than £18 a year better off and that the poorest households, including pensioners, will benefit the most, because it will be a greater proportion of their income. The implementation date will be 1 September, to ensure that they get the benefit in this winter's bills.

Mr. Yeo

In view of the Government's propensity to claim that they, keep their promises, why, when an official Front-Bench Labour spokesman before the general election promised that, alongside the Budget Red Book, a green hook would be published, setting out the Budget's environmental consequences, no such book has appeared?

Dawn Primarolo

We have every intention of keeping that promise from the first full Budget.

Mrs. Mahon

Does my hon. Friend agree that many decent people will welcome the alleviation of fuel poverty and that reducing cold-related illnesses will save the national health service a great deal of money?

Dawn Primarolo

I agree that it is important to ensure that people can keep warm and that the scandal of hypothermia is tackled, with the consequent reduction in costs for the national health service. We also intend to introduce an insulation and energy efficiency programme to ensure that people can not only heat their homes and stay warm but can do so as efficiently and cheaply as possible.

Mr. Swinney

In implementing the welcome cut in value added tax on domestic fuel in early September, will the Financial Secretary consider ensuring that customers who have credit balances in their gas and electricity accounts suffer no prejudice because of their prepayments or increased contributions to their accounts, and that they do not receive bills that they need a maths degree to understand?

Dawn Primarolo

I can confirm that the provisions in place for the energy companies ensure that they will be able to apportion bills to ensure that people get the full 5 per cent. reduction; there should be no problems with that.

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