§ 8. Mrs. MahonIf he will make a statement on the reduction in VAT on domestic fuel. [12655]
§ 9. Mr. RuaneWhat representations he has received on his reduction in VAT on domestic fuel from 8 per cent. to 5 per cent. [12657]
§ Mr. Gordon BrownThe change to a 5 per cent. rate on VAT came into effect on 1 September, benefiting all households well in time for winter fuel bills. This honours our manifesto commitment to the people of Britain.
§ Mrs. MahonI thank my right hon. Friend for that answer. Does he agree that the manifesto pledge that we kept will stop the obscenity of pensioners having to choose between eating and heating?
§ Mr. BrownNot only have we cut VAT on fuel but we have abolished the gas levy. At the same time, in our welfare-to-work programme we are introducing an insulation programme to enable elderly people to insulate their homes against the winter cold. These measures add up in only 18 weeks to far more than the previous Government did in 18 years.
§ Mr. RuaneI thank my right hon. Friend for his comments. My constituency, Vale of Clwyd, has the second highest number of pensioners in Wales, and his announcement will go down well there. Does my right hon. Friend have any further proposals to promote warmer homes, such as a reduction in VAT on insulation schemes?
§ Mr. BrownThat is part of a review that we promised at the time of the Budget—and, indeed, before the election—which will report soon. As for the measures that we are taking to protect elderly people against the winter cold and to enable them to have better insulated homes, the environmental task force being set up under the welfare-to-work programme will have a significant role to play. I accept that for elderly people, whose fuel bills are a far higher proportion of their income and expenditure, Government action is necessary. However, I remind my hon. Friend that if the Conservative party had had its way, 1019 VAT on fuel would have been 17½ per cent.—it was the Labour party that stopped it rising to 17½ and then reduced it to 5 per cent.
§ Mr. RobathanHow does the Chancellor balance the electorally popular measure of reducing VAT on fuel with the hard choices, about which the Prime Minister spoke, involved in reducing carbon emissions? Is not the policy of reducing VAT on fuel in direct contradiction to the hard choices involved in reducing carbon emissions and the incremental growth in taxation on petrol?
§ Mr. BrownIf the hon. Gentleman is saying that the policy is in direct contradiction to the objective of energy efficiency, I assume that the Conservative party is pledging at the next election to raise VAT on fuel from 5 per cent. to 8 per cent. and perhaps to 17½ per cent. When the Opposition Front-Bench spokesman rises to speak, perhaps he will tell us what the Conservative policy is. Only a few minutes ago, when talking about the environment, my hon. Friend the Financial Secretary spelled out all the measures that have been taken to honour the Prime Minister's commitment on the environment. We are an environmentally friendly Government who are dealing with the problems of energy efficiency and insulation.
§ Mr. BoswellBefore the Chancellor overdoses on self-congratulation, will he confirm, as the Economy Secretary has already done in the House, that had he not deftly chosen to manipulate the implementation date of the reduction in VAT on fuel—introducing it on 1 September, before the pensions uprating, rather than after it on 1 October—the state pension would have risen next April by an additional £6.23 per year for a pensioner couple and £3.90 per year for a single pensioner? Has not his manoeuvring taken that money directly out of the pockets of pensioners?
§ Mr. BrownHere we see the Conservative party in action. [HON. MEMBERS: "Answer."] It is about time the Conservatives listened to what is happening. They are saying again that VAT on fuel should not have been reduced in September and that we should have waited longer, letting pensioners suffer during the winter. We were not prepared to do that.