Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason his Department has decided not to cut VAT on domestic energy bills.

The Government already applies a reduced rate of VAT at 5 per cent on domestic fuel and power such as gas and electricity.

The Government is providing significant financial support of up to £350 to the majority of households, which will cover more than half of the forecast £700 rise in energy bills for the average household. This support is worth £9.1 billion in 2022-23. This is more generous than removing VAT on domestic fuel and power, which would not be targeted because it would also benefit high-income households that do not need support. There would also be no guarantee that suppliers would pass on the discounts to all customers.

While the Government keeps all taxes under review, there are no plans to remove VAT on domestic fuel and power.