Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of temporarily cutting VAT on energy to assist vulnerable households with rising energy costs.

VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. While there are exceptions to the standard rate, these have always been limited by both legal and fiscal considerations.

However, in recognition of the fact that families should not have to bear all of the VAT costs they incur to meet their needs, domestic energy such as gas and electricity, as well as heating fuels and oils, is subject to a reduced rate of VAT of 5 per cent.

Although the Government keeps all taxes under review, there are currently no plans to change the VAT treatment of domestic energy.