We were always told by Labour when signing away our powers of self government in successive treaties that taxation was a red line issue. It would remain a matter for national determination. Recently the UK Parliament was united in wanting to scrap the tax on feminine hygiene products, only to be told under EU law we were not allowed to.
On 4 June last year the European Court of Justice upheld a complaint against UK tax policy brought by the EU Commission. They argued successfully that the UK is not allowed to tax “energy saving materials” at just 5% but has to impose a full 20% VAT on them. A long list of green or energy saving products, including insulation, draught strip, central heating controls, hot water system controls, solar panels, wind and water turbines, ground and air source heat pumps, micro combined heat and power units and biomass boilers are all subject to our reduced rate and were all adjudged illegal.
The government has decided it therefore needs to impose extra VAT on all these goods, bringing in an additional £65 million a year from next year. I for one will be opposing this measure, as I do not wish to see energy conservation taxed in this way and object strongly to the erosion of our taxation powers by the European Court. It will be interesting to see who will vote with us in opposing this needless and undesirable tax increase.