§ Mr. MaddenTo ask the Chancellor of the Exchequer if VAT on fuel bills will be inclusive, or exclusive, of any standing charge levied; what arrangements are available to Her Majesty's Government to vary positive rates of VAT downwards; and if he will make a statement.
§ Sir John CopeStanding charges are regarded as part of the payment for the supply of fuel and power and will therefore be subject to the VAT changes introduced by section 42 of the Finance Act 1993.
Only those goods and services specified in a list annexed to EC directive 92/77/EEC can be moved from the standard rate of VAT to a reduced VAT rate. The reduced rate cannot be lower than 5 per cent. and there are no provisions for the introduction of zero rates of VAT.