§ Mr. CousinsTo ask the Chancellor of the Exchequer if he will estimate the total cost of reducing VAT on fuel to 5 per cent; and how much of this sum will accrue to each decile of the income distribution. [24683]
§ Dawn Primarolo[holding answer 26 January 1998]: The cost of reducing VAT on domestic fuel from 8 per cent. to 5 per cent. is estimated to be £485 million in 1998–99. This is split between income deciles in the table together with the gain to households as a percentage of their net income. 267W
Income decile Cost (£ million) Percentage of net household income Bottom 45 0.30 2 45 0.20 3 45 0.20 4 45 0.15 5 45 0.15 6 45 0.10 7 50 0.10 8 50 0.10 9 55 0.10 Top 60 0.05 Average 485 0.10 The information is based on Family Expenditure Survey data. The cash in the table has been rounded to the nearest £5 million. The percentages have been rounded to the nearest 0.05 per cent.