§ Mr. Ian BruceTo ask the Secretary of State for Social Security what was the effect on(a) the average family on benefit, (b) a single pensioner and (c) a pensioner couple of the introduction of VAT on fuel at 8 per cent., taking into account (i) VAT fuel subsidy added to their benefits and (ii) the impact on the annual uprating of benefits of the inflationary effect of increasing domestic fuel prices by 8 per cent. [5200]
§ Mr. Keith BradleyAs part of our commitment to reducing poverty we will cut VAT on fuel from 8 to 5 per cent. the lowest possible level.
The net effect of the introduction of VAT on fuel at 8 per cent. is given in the following table:
Family type Net effect of VAT on fuel at 8 per cent. (1997–98 prices and benefit levels) Average family on income 15p per week worse off support (assumed to be a couple with two children aged under 11) Single retirement pensioner No net effect Couple retirement pensioner 5p per week better off 1. Expenditure estimates based on the 1994–95 Family Expenditure Survey, uprated to 1997–98 levels using the fuel and light component of the Retail Prices Index.
2. Effect of VAT on domestic fuel and power on the uprating indices estimated using the 1997 weight of the fuel and light component of the Retail Prices Index.