“Tampon tax” – setting the story straight

I’m blogging here to try to explain a complicated thing that happened in Parliament recently. There’s been a lot of misinformation about a thing people are calling “tampon tax”.

 

The Commons was examining the Finance Bill, which enacts the Budget and puts various rates of taxes into law.  An amendment had been proposed on the subject of the VAT charged on sanitary products.

 

Tampons and other products have a 5% VAT rate.  In other words, if you buy a box of regular tampons from Asda for £1, around 5p of that is VAT. VAT is actually controlled by the EU, and it dictates what products can be free of VAT, or “zero-rated”.  In Britain we apply a 20% rate to most things, a 5% reduced rate on some things and then 0% on a set of things that the EU lists as “essential”.

 

It is blindingly obvious that sanitary products are essentials. So, I think we should get them into the zero category.  If you follow the debate (http://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm151026/debtext/151026-0003.htm, starting at about 6.30pm, labelled “26 Oct 2015 : Column 92”), you'll see that there was cross-party agreement that sanitary products are no luxuries and that it would be right to lower the tax currently on them even further.  However, the UK does not have the ability to extend zero-rating to new products unilaterally.  It's an EU law.

 

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 states. Without that agreement, we are not permitted to lower rates below 5%.

 

 (If you think that’s mad, perhaps you think it’s a good argument for leaving the EU or, at the very least, renegotiating our relationship with it, as the Conservative Government is doing.)

 

The debate and the vote that happened in the Commons was about the amendments which were put, which simply asked for the Government to return to Parliament with a report on talking to the EU about it.  I voted against the proposed amendments, not because I believe sanitary products should be taxed as luxuries, but because they were not constructive proposals in themselves.  We don’t need more reports – the Minister had already agreed with the principle and said that he would trot off to the European Commission to argue Parliament’s cross-party view that it should be possible for a member state to apply a zero rate to sanitary products.  I prefer action over words, so didn’t think the amendments were needed on top of this action.

 

This is how law-making works:  sometimes you end up making decisions on small aspects of a big and important question.  And sometimes people grossly misrepresent what you’re doing.  This wasn’t about putting tax on tampons – everyone was agreed that we should take it off!  Nor was this about party politics, but that escaped many on the left who just wanted to attack Conservatives.  One Green Party member in Norwich tweeted at me that “only a woman who doesn’t bleed, who isn’t even human” could vote for tax on tampons.  That’s patently silly as well as untrue because I didn’t vote for more tax on tampons. 

 

If we want grown up politics, then let’s be grown up about how law actually works.  We should make laws like this better, and we should work together to argue Britain’s interests in Europe.