§ Mr FlynnTo ask the Chancellor of the Exchequer, pursuant to his answer of 23 July,Official Report, column 595, what effect he expects the reduction of VAT on domestic fuel to have on (a) the retail prices index increase in Septemberr 1997 and (b) the basic pension uprating in April 1998, assuming that the uprating is in line with prices and average earnings respectively. [11492]
§ Mr. Geoffrey Robinson[holding answer 30 July 1997]: The effect of reducing VAT on domestic fuel from 8 to 5 per cent. would be to reduce retail prices index inflation by 0.12 percentage points. The state retirement pension is uprated in April of each year by the annual RPI inflation rate for the preceding September. Uprating by the RPI reflects the changes in prices paid for goods and services; so the real value of the pension is not affected.