VAT and the tampon tax

A3 Poster -Believe In Britain

As I’ve touched on before, the EU controls (among other things) our VAT levels.

That’s why, at a recent debate on the subject in Parliament, the proposal to scrap VAT on tampons was rejected – because the Tories knew that it wouldn’t be possible and that they’d have to admit to the general public that the EU were in control.

Here are some extracts from Hansard (with my emphasis at certain points);

Bit by bit pressure grows on European Union supporters as the weakness of Parliament’s legislative independence is exposed.  MPs want British girls and women to be able to afford sanitary products without also being taxed on them.  The government has to admit it cannot comply with Members of Parliament’s demands because the EU will not permit them to!

If you are interested, here is another classic example of Parliamentary business stymied entirely by the foreign European Union.  Read what the Treasury minister says to explain the UK Parliament’s powerlessness.  These are the facts that need to be publicised during the OUT campaign, especially to first time voting girls and to women generally.  The EU does affect them negatively.

(Finance Bill (Ways and Means) (Payment of Corporation Tax), new Clause 9 — inheritance tax review in the House of Commons at 5:30 pm on 26th October 2015.  Source Hansard, c124.)


David Gauke The Financial Secretary to the Treasury

The issue that has dominated the debate is new clause 7 and VAT on tampons and sanitary towels.  New clause 2 would require the Treasury to write a report on a VAT exemption of women’s sanitary protection products including a financial assessment of the impact on the purchasing of these products, especially for those aged under 25.


Anne-Marie Trevelyan

I put my name to this amendment because I have long thought that this is a bizarre and discriminatory tax on sanitary products and it needs sorting out.  Perhaps in the 1970s, when I am sure the Minister like myself was at school, the luxury goods description still made sense as many women were not using a product which has now transformed our ability to be freed up from the monthly restrictions of periods.  Many girls at school with me were off games every month because they did not have access to what is now considered a completely normal part of our sanitary products and frees young women to be sportswomen.  I ask the Minister to be brave, to think about this and to stand up for all young women.


David Gauke The Financial Secretary to the Treasury

I am grateful to my hon. Friend for her remarks, and I will address that point in a moment.

New clause 7 would require the Chancellor of the Exchequer to “lay before both Houses of Parliament a statement on his strategy to negotiate with the European Union institutions an exemption from value added tax for women’s sanitary protection products” within three months of the passing of the Act.  It would also require a Minister of the Crown to “lay before Parliament a report on progress at achieving an exemption from value added tax for women’s sanitary protection products within European Union law by 1 April 2016.”


This debate has highlighted the ongoing campaign to zero-rate or exempt from VAT tampons and other sanitary protection products.  As we have heard tonight, that campaign has cross-party support.  In the case of the hon. Member for Walthamstow (Stella Creasy), that support goes back many years to when she was at school.  My hon. Friend the Member for Bristol North West (Charlotte Leslie) has also campaigned on the issue for many years, and my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) has raised it tonight and on other occasions, as have many other hon. Members.


As the hon. Member for Worsley and Eccles South (Barbara Keeley) pointed out, this Government sympathise with the aim of the new clause.  As we have also heard, however, the UK does not have the ability to extend zero rating to new products unilaterally.  We have more extensive zero rating than most, if not all, other member states, but any change to EU VAT law would require a proposal from the European Commission and the support of all 28 member statesWithout that agreement, we are not permitted to lower rates below 5%.  None the less, as this debate illustrates, there is considerable cross-party support for the UK to abolish VAT on sanitary products.  To that end, I undertake to raise the issue with the European Commission and with other member states, and to set out the view, which has been reflected in this debate, that it should be possible for a member state to apply a zero rate to sanitary products.  In that context, I thank the hon. Member for Dewsbury (Paula Sherriff) for raising the matter tonight.  We have seen on both sides of the House a demonstration of the belief that that flexibility should exist.


Bill Cash Chair, European Scrutiny Committee

My hon. Friend used the word “permitted”.  We do not have the capacity to effect a change such as this, because of the European Communities Act 1972.  He knows that, the Opposition know it, and Members on the Conservative Benches know it.  Will he now commit not only to talking about this but to doing something about it?  It is a hugely important cross-party issue.  Will he please take on board the fact that we insist on legislating on our own terms in this House?  We want to govern ourselves.


David Gauke The Financial Secretary to the Treasury

I do not want to conceal from the House the fact that we do not have flexibility in these circumstances.  Nor do I want to conceal the challenge that we would face in reaching agreement on this.  Other member states take a different approach.  As the hon. Member for Walthamstow has pointed out, it was striking that the vote in the French Assembly just a couple of weeks ago on an attempt to move the rate down from 20% to 5.5% was defeated.  I do not wish to pretend that this would be a mere formality; other member states do take a different approach to this issue.


Paula Sherriff

If the Minister is pledging to start negotiations, will he also give us a clear commitment to come back and update the House, and if so, will he tell us exactly when he will do so?


David Gauke The Financial Secretary to the Treasury

I would certainly be happy to update the House on any developments at any stage, as and when they might occur.  I am happy to give the hon. Lady that reassurance.


Stella Creasy

It is incredibly welcome to hear that the Minister is going to raise this matter, but may I press him to be a bit clearer about which environment he will raise it in, and about when we will hear back?  Will he also confirm that the European Commission can produce a zero rating if it is declared to be in the public interest to do so?  Will he commit to raising that point as part of his negotiations with the European Commission?  We all recognise the points that have been made about the technicalities of VAT, but there is a public interest exemption that he could use in his negotiations, is there not?

David Gauke The Financial Secretary to the Treasury

It does require a proposal from the Commission and the support of all 28 member states.  Just to be clear, this is not a formality.


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