§ Mr. Ian BruceTo ask the Secretary of State for Social Security what factors underlie the different estimates contained in the answer of 24 June,Official Report, column 491, and the Prime Minister's oral answer of 24 June, Official Report, column 686, on the impact on pensioners of the imposition of VAT on domestic fuel. [71 16]
§ Mr. Keith BradleyThe policies of the previous administration, including the introduction of VAT on fuel, have created real poverty, growing inequality and widespread insecurity for pensioners. Between April 1994 and April 1997, the average pensioner was undercompensated for the additional cost of fuel and power. In 1997 the compensation is adequate because of a real fall in the prices of fuel and power. Some pensioners could still be worse off, because of their individual circumstances.
The reduction of VAT on fuel to 5 per cent. will ensure that the poorest households, including pensioners, benefit most in proportion to their incomes, and that everyone will see the benefit in their fuel bills this winter.