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Fuel (Vat)

Volume 76: debated on Monday 1 April 1985

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asked the Chancellor of the Exchequer if he will make a statement on the implications for energy policy of the reasoned opinion of the EEC Commission on the levying of value added tax on fuel including gas and electricity.

At present the reasoned opinion has no implications for energy policy. The Commission has alleged that, when supplied to businesses, the United Kingdom's zero rating of fuel and power is contrary to the provisions of the sixth VAT directive. As I told my hon. Friend on 22 November 1984 at column 270, the Government has rejected the Commission's view, and the Commission must now decide in the light of our response whether to put the matter to the European Court.