Value Added Tax (Fuel) (Hansard, 12 March 1998)

§ 11. Ms Stuart
What representations he has received from pensioners' organisations on his reduction in VAT on fuel. [32503]

§ The Paymaster General (Mr. Geoffrey Robinson)
We said in our election manifesto that we would reduce VAT on domestic fuel to 5 per cent. My right hon. Friend the Chancellor introduced that measure in his July Budget. It is another example of the Labour Government fulfilling their promises.

§ Ms Stuart
I welcome my right hon. Friend's action to reduce VAT to the lowest level possible, from which some 18,000 pensioners have benefited in my constituency alone. Does my hon. Friend agree that pensioners are the most vulnerable group and the greatest victims of the previous Administration's imposition of VAT on fuel?

§ Mr. Robinson
My hon. Friend is correct on all those points, and the measure will have been welcomed by pensioners in her constituency as it was by pensioners 744 throughout the country. It is worth bearing in mind the fact that, when the Conservative party was in Government, it introduced VAT on fuel. Together with the Liberal Democrats, we prevented them from increasing VAT to 17.5 per cent. and, in line with our manifesto commitment, we reduced it to 5 per cent. Pensioner households spend approximately 50 per cent. more of their income on fuel than ordinary households and they therefore benefit most from the measure—[Interruption.]

§ Madam Speaker
Order. The hon. Member for Teignbridge (Mr. Nicholls) is disrupting the proceedings.

§ Mr. Evans
Is the Minister aware that Age Concern backed my private Member's Bill on the wind chill factor, which would have given extra support to the poorest pensioners on income support in the coldest parts of the country? Will the Minister ensure that his Department makes provision for next year—it is now too late for this year—and backs my Bill so that those pensioners get the support that they deserve? Originally, it was not my Bill but that of a Labour Member, who tried to push the Bill through the House before the general election. Is it not a case of telling pensioners one thing before the general election and letting them down badly afterwards?

§ Mr. Robinson
The whole House will welcome the hon. Gentleman's belated concern in these matters. He will remember voting for VAT on fuel when his party was in government. This Government have introduced winter fuel payments of £20 for ordinary pensioners and £50 for pensioners on income support. That goes further than the recommendations to which the hon. Gentleman refers. Taken together, the measures that we have introduced—on the abolition of the gas levy, the reduction in VAT and the winter fuel payments—mean that pensioners are £100 better off on average, and £130 better off where they are on income support.