HC Deb 18 January 1995 vol 252 cc554-5W
Ms Coffey

To ask the President of the Board of Trade what is his estimate of the effect of value added tax on gas and electricity levels of consumption by(a) low users and (b) high users.

Mr. Charles Wardle

My right hon. Friend the Minister for Industry and Energy's reply to the hon. Member for Bradford, West (Mr. Madden) of 22 March 1993,Official Report, column 484–85 stated that the imposition of VAT on 17.5 per cent. on gas and electricity was expected to reduce domestic sector energy consumption by about 4 per cent. below what it would otherwise have been. This estimate took no account of any offsetting measures. There is no specific estimate available for the effect of 8 per cent. VAT on domestic fuel, but it may be assumed that the effect would be roughly half that given for the 17.5 per cent. rate. No separate estimates of the effects on low and high users are available.