§ Mr. Fabricant
To ask the Chancellor of the Exchequer what would be the gain per annum for the average family if VAT on fuel were reduced from 8 per cent. to 5 per cent. and the net gains to pensioners if the VAT fuel subsidy was withdrawn accordingly. 
§ Dawn Primarolo
[holding answer 22 May 1997]: The estimated full year gain in 1997–98 for the average household; if VAT on domestic fuel and power was reduced from 8 per cent. to 5 per cent., is about £18 per annum. Amongst households with a pensioner head, the average gain is slightly under £16 per annum. The VAT fuel subsidy was designed to compensate pensioners and other vulnerable groups with average spending on fuel and power. If the subsidy were reduced to directly reflect the reduced expenditure on fuel and power there would, on average, be no net gain or loss.