Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her department has made of the potential impact of VAT on domestic energy bills on regional inequalities in electricity standing charges and unit rates.

The Government is committed to lowering the cost of standing charges and have worked constructively with the regulator, Ofgem, on this issue. At the same time, the Government has taken significant steps to support households with the cost of energy while we transition to cheaper, clean power by 2030.

Domestic gas and electricity, including heating oil, benefit from a reduced VAT rate of five per cent, rather than the standard 20 per cent. This reduced rate cost the Exchequer an estimated £6.5 billion in 2024–25.