Treasury written question – answered at on 4 November 2025.
Ben Lake
Plaid Cymru, Ceredigion Preseli
To ask the Chancellor of the exchequer, what assessment she has made of the potential impact of reducing VAT on domestic energy Bills on Fuel Poverty in Wales.
Dan Tomlinson
The Exchequer Secretary
The Government believes that we need to support households who are struggling with energy Bills now whilst we transition to cheaper clean power by 2030. We are providing targeted support that reaches low income households directly across Great Britain, including Wales.
This winter, 2.7 million extra households will receive £150 off their energy bills as the Warm Home Discount is expanded - putting money directly into people’s pockets. This increases the number of households who are eligible to over six million in total - including 900,000 families with children and a total of 1.8 million households in Fuel Poverty.
More widely, gas and electricity are subject to a reduced rate of VAT at five per cent, rather than the standard 20 per cent. The reduced rate for domestic fuel and power cost the Exchequer £8 billion in 2023-24, and going further would come at a significant additional cost.
Yes0 people think so
No0 people think not
Would you like to ask a question like this yourself? Use our Freedom of Information site.
A household is said to be in fuel poverty when its members cannot afford to keep adequately warm at reasonable cost, given their income.
The chancellor of the exchequer is the government's chief financial minister and as such is responsible for raising government revenue through taxation or borrowing and for controlling overall government spending.
The chancellor's plans for the economy are delivered to the House of Commons every year in the Budget speech.
The chancellor is the most senior figure at the Treasury, even though the prime minister holds an additional title of 'First Lord of the Treasury'. He normally resides at Number 11 Downing Street.
A household is said to be in fuel poverty when its members cannot afford to keep adequately warm at reasonable cost, given their income.
A proposal for new legislation that is debated by Parliament.
