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.
March 17, 2016
Indeed and energy saving is particularly important in the UK as Rudd and the government have a policy of driving up energy prices with their bonkers agenda/religion of pushing expensive unreliable wind/wave/lagoons and other total insanities.
We saw yesterday what a dreadful chancellor Osborne has been, doubling the total borrowings over his period of tenure, productivity still dire, trade deficit dire, PSBR dire, very little wage growth, tax complexity increased hugely & pointlessly, endless tax hikes over his eight budgets yet still he is failing to balance the books.
It seems he has just delayed he further pension raid for referendum reasons.
Absurdly unfair taxes on pensions, landlords & tenants, he reduces CGT but not even for residential property (why?). A pathetic distraction of a sugar tax for the foolish man. Politics over substance and what works every time.
I had not noticed Jamie Oliver’s recipes being particularly low in sugar & fat. Could it be that some sugars are just better than other sugars to Osborne?
Bread, potatoes, rice, pasta and carbohydrates all get turned into to sugars too. Fruit juices, smoothies, bananas and fruit are loaded full of sugars too.
March 17, 2016
The growth that the UK/Osborne has is essentially driven by low paid, low productivity immigration and population increase (that does not pay its way) and excessive government and personal borrowing. It does not look very sustainable indeed it looks pretty dreadful. It is GDP per capita growth that is needed.
He is putting huge pressures on the NHS, schools and services and yet he is failing to make suitable provision – this because the low paid are simply not paying enough taxes for him to do so.
These low paid jobs are driving productivity down, the banks are still far too slow and restrictive and have a huge lack of competition.
Even the lefty BBC Newsnight seems to have worked out that Osborne is essentially a dreadful socialist chancellor. He strategy of higher tax rates, mugging pensions, the rich, non doms and landlords and endless tax over complexity is totally misguided, damaging simply will not work. We cannot all work as tax experts some people need real and productive jobs.
A Mayor for East Anglia and the West of England too. The break up/end of the UK continues a pace.
Brexit is the only way out, get rid of Osborne and Cameron before it is too late.
March 17, 2016
Competitivity, future growth (and jobs) to be hit further soon by his totally misguided national minimum wage increases and work place pensions driving up costs for business. The man is clearly irrational, innumerate and simply barking up totally the wrong tree. Wage increases come from better productivity and supply and demand for labour. Laws, to push wages up artificially, merely destroy and export jobs and push production overseas, reduce UK company profits and reduce ability & incentives for them to invest in the UK for the future.
Thus destroying productivity further, how did an allegedly Conservative government end up with such a misguided man as chancellor. Still we have Rudd at Energy, Soubry at small business (why? she was a lawyer and journalist), Greg Clarke, Hammond, the rather confused over immigration Mrs May. Morgan – what a dire list of rather unsuitable people Cameron has forced on us.
March 17, 2016
Never mind John, in another 97 or so days -hopefully- we will be able to tell the EU not only what they can do with their ECJ ruling but what they can do with VAT its self, the sooner we return to a more flexible purchase tax system were governments (even county councils) can adjust or even abolish rates to suit national (or local) needs the better. I hope the Brexit side will make the most of this ECJ ruling, this “Insulation Tax” is a better example of EU tax meddling than the “Tampon Tax” is as it affects every man, woman and child, from new-born to those receiving the ‘telegram’ from Her Majesty!
March 17, 2016
We shall see, the betting odds are against Brexit and Cameron has invited the failed US President Obama to help his cause. Hopefully it will backfire like most of Cameron’s agenda.
I still think Brexit will prevail surely the voters will not want the death of UK democracy for ever they will never get a second chance.
March 17, 2016
Slimy underhand antics from Osborne and Cameron. It is the same with EU migration. Rather than take responsibility for their actions, they do not discuss or run away. Their tactic is to announce a gimmick and move onto to the next. Anything controversial is. To mentioned or discussed and they will avoid any opportunity to be pressed on the matter.
You have the answer get rid of Cameron, he is going so it would be better for your party if he left now. His weird little side kick will follow. He has missed every target he set himself, and despite his false words on the radio this morning the public cannot get rid of him as chancellor. Only his posh mate can. Reports showing vast amounts of our taxes being wasted by the Eau on immigration under the guise of overseas aid. People tend to forget that a sixth of overseas aid is spent by th EU without any say from any British politician and it is never mentioned in the inaccurate club fees that you quote. Reported Cameron is willing to give away £500 million of our taxes to Turkey when the “rock solid” exemption EU asylum policy does not require our country to pay a penny. How does this equate to Osborne’s dopey adding up and squaring the books? Why did he not apologise to Mr Humphries this morning for being addicted to wasting our money when we cannot afford it?
March 17, 2016
If I ever needed anything to bias me in favour of Brexit, it would be American politicians, especially Mr Obama, telling me what to do.
March 17, 2016
Jerry,
I too want to see this country out of the EU. The battle after that is to get a different government. Currently we have two socialist parties trying to out-do each other on raising taxes while telling us it’s for our own good.
I want a governments that will slash the welfare state back to being simple safety net – it’s not the government’s role to make people “better off” by handing them my money.
I want a government that keeps its sticky fingers out of my wallet and keeps its moral lifestyle opinions to itself.
March 18, 2016
John, the BBC & Sky news are reporting this morning that the “Tampon Tax” is set to be scrapped due to a deal made with the EU (as I suggested it would be, in an attempt to bribe the UK electorate to stay in), it is thus even more vital that this EU imposed “Insulation Tax” is now highlighted were ever when ever it can.
March 17, 2016
I would have thought there would not be much point in voting against except as a protest as Brussels and ECJ run our country now and what they say goes.
I suffer from national pride but I am not a nationalist I understand that borders are coming down and fundamentally that is good. However it has to be a gradual and when and how that happens should be decided by those who live in those borders and not imposed by a foreign power. At the same time I believe in localism and therefore decentralising government so decision making is closer to those it effects.
The UK is making great strides in that direction as regions and countries that make up our union are being granted more powers. It is therefore incongruous that at the same time we have less powers that can be devolved because the EU has snatched them away from us. No doubt it will not be long before the EU starts reeling back in those devolved power and they will no longer be in the remit of our regions and countries.
March 17, 2016
Good morning.
The UK Government has not decided to increase the VAT on those products, our TRUE GOVERNMENT has.
And even if ALL the EU loving UK MP’s, MEP’s and Scottish, Welsh and Ulster Regional Parliament MP’s all voted against it, it would not matter a jot. There is nothing you can do about it, is there ?
And once more we see, that our so called elected representatives just roll-over because they have effectively made themselves redundant. But the biggest joke of all, is that we, through our taxes, including VAT, are paying for all this.
OUT !!!!
March 17, 2016
Another power lost.
The OBR found £27b in November; Osborne, the heir to Brown, spent £19b of it. Now the OBR has lost the£27b and Osborne the Pension Thief has borrowed £40b. Looks like he should’ve saved that cash and been a little more conservative with his spending. He’s now borrowed more than all Chancellors put together apart from Darling.
The increasingly absurd, sopping wet, lackey, Matthew Hancock says the government needs to set deficit targets and keep to them. Only problem being that’s not happened since 2010! Sajid Javid had his leg pulled awfully on news night last night. He really is a true Eurosceptic, pity he put careerism above his conscience. He looks like he regrets it everytime he speaks in public. When will these traitors and assorted idiots realise that the English electorate, who are mostly Eurosceptic and look witheringly on an absence of principle, will not forgive them. If Javid and others like him think that Osborne can save them from the wrath of the local Tory associations then they’re idiots.
March 17, 2016
Bad news seldom does get a mention, or it is hidden in the detail of the Budget, and gets lost in the dramatic bits – if there are any. Very cunning!
March 17, 2016
I wonder if the BBC will let the cat out of the bag.
On another subject in the Budget.
Why is the Government/taxpayer now subsidising so called lifetime ISA’s by 25% for a particular age group.
We already had House deposits/purchase subsidised for the under 40’s and now savings ?
Why is it involved at all ?
Yet another false market created, which is governed by the one thing a person can do absolutely nothing about, which is their age.
March 17, 2016
@AJ
Just introducing more layers of complication into the tax & benefits system.
These socialists are just compulsive tinkerers.
It would have been better raise tax thresholds to the level of the minimum wage, and let the earners decide how to spend/invest their own money.
March 17, 2016
Well, at least every person under 40 will have the same right to this 25%. Take just one minute to compare this with the present pension system in which the tax rebate depends on your tax rate. Do think a bit, this rebate is a subsidiary from the tax payer to a small group of people, much more unequal in its scope.
As someone with children and grandchildren below the age of 40, I can only applaud this LISA.
March 17, 2016
It must be so depressing to be 41.
March 17, 2016
Hefner
Surely far better to have no tax subsidy on pension investments at all, and allow it to be tax free when you take it.
Government not involved as you pay out of taxed income, and draw a tax free investment.
Same should be common to all savings accounts.
So bloody simple.
No taxpayer subsidy needed at all, and no civil servants to pay to administer anything.
March 18, 2016
@AJ
Exactly, keep it simple.
March 17, 2016
More wealth redistribution by BluLabour.
We are now being governed by celebrity chefs it appears. If Saint Jamie of Oliver wishes to dictate policy, why doesn’t he stand for election? I don’t drink fizzy pop anyway but, the sugar will be replaced by artificial sweeteners and I would suggest, they may be more harmful than the sugar they’ll replace.
John….I was amazed to see the Chef at Westminster interviewed on the State’s Broadcaster straight after the sugar tax surprise….Was he told of the new tax in advance? How does that sit beside Mr Cameron’s policy of “telling the members of the commons first” policy?
Is Mr Osbourne doing the EU’s dirty work for them by brining in regionalisation of England…Something the people rejected under Labour?
March 17, 2016
Cliff
Its the small end of the wedge, high calorie foods next.
Just another stealth tax stream scam.
March 18, 2016
It is being reported that a tax on “takeaway coffee cups” may be the next tax to be introduced. They are looking at a five pence tax per cup, because too few are only used once and not recycled.
I read a few days ago that a carrier bag company went bust as a result of the carrier bag tax.
Oh for a real Conservative government!
March 17, 2016
Blulabour .. i like it!
March 17, 2016
@alan jutson; “I wonder if the BBC will let the cat out of the bag.”
Well I haven’t seen it on the Sky News website yet, if they have then it has been buried, same with the Ch4 News website….
March 17, 2016
A perfect example of the power of the ECJ, the lack of control of our own tax affaires, and the tenuousness of anything that Cameron believes he has negotiated with the EU. Make sure that the Brexit campaign uses this to the full.
March 17, 2016
Perhaps you will do another post on the budget? Hats off to George Osborne for the cut in CGT to 20% – a measure which signals the UK values entrepreneurship and investment. Also the school reforms. Also the corporation tax cut. The budget is heading in the right direction. Pathetic interview with Labours ridiculous John McDonnell by the BBC today programme in which McDonnell in not reminded that the UK economy is the fastest growing in Europe, and not reminded that CGT receipts fell when the rate rose.
On this VAT issue do we not agree that membership of a single market – which in the event of Brexit we wish to retain – means three things: no tariffs; recognition of regualtory standards so goods & services good for one market are good for another; no state aid. I suppose a 5% VAT could be deemed state aid?
March 17, 2016
Listening to the Shadow Chancellor, just now on radio 4, he is clearly even dafter than the socialist Osborne – what a dire choice.
Socialist lunacy or extreme socialist lunacy.
March 17, 2016
He certainly is absurd. Have you heard his deputy, Sheena somebody? Completely inarticulate – parroting meaningless phrases ‘what we have said…’ ‘invest for growth..’ Neither of them is challenged eg by being asked why they think the UK is now growing faster than other countries, why unemployment is falling etc. These people would be an order of magnitude worse than Miliband and Balls.
It is certainly to be hoped that the terrorist-sympathising far left of Labour will be kicked out before the election to remove that threat to the UK.
March 17, 2016
@Richard1; “[hopefully the] far left of Labour will be kicked out before the election to remove that threat to the UK.”
To say that you must truly believe that Labour stand an above average chance in 2020 with the current leadership in place, and with the current Tory leadership and (often) knee-jerk policies in place perhaps they do!
But if Labour are as dire as many like to suggest, think about what happened in 1983, would Thatcher’s government have won such a majority had the Labour party offered the manifesto of the SDP instead of that political ‘suicide note’, why would the right wish to have more moderate people writing the Labour 2020 manifesto?..
March 17, 2016
It is true that the Corbyn led Labour Party has very little chance of winning an election. But I would rather see a moderate Labour opposition, so if it did get in the damage to the country would be more limited. After all they are bound to get in again at some point.
March 18, 2016
@Richard1; If the UK electorate were to elect a Corbyn lead government on his expected Labour manifesto then all I can say is that the electors must think far worse of the Tory party and the right generally!
The biggest threat to allowing a Labour government in, that doesn’t have a democratic and popular mandate, is UKIP splitting the right-wing vote – that said, I hope neither Labour or UKIP change their leaders before mid 2020…
March 17, 2016
I assume that this is the EU compliance?
“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.”
Yes…I think we know the answer to them! Food next?
March 17, 2016
No the government did not decide, the EU unelected officials decided and the government presented their findings! One of these organisations are of no use to the UK taxpayer, about time a highly educated Cameron worked it out.
March 17, 2016
Did the EU order that the UK Government had to impose 20% VAT? This is a good example for Brexit.
March 17, 2016
No I don’t think so…
http://www.vatlive.com/vat-rates/european-vat-rates/eu-vat-rates/
March 17, 2016
Indeed you could fill the house of commons with 650 members of the ‘ abolish vat party’ yet still it would not be abolished.
If that is democracy I am a banana as Ian Hislop nearly said.
March 17, 2016
I don’t think so, the order would be that the minimum rate of 5% permitted by the EU could not be applied in this case and it should be the standard rate. However not all EU member states have a standard rate of 20%, the lowest permitted is 15%.
March 17, 2016
Utter stupidity, and masked by a ridiculous focus on sugary drinks. The EU orders us to increase hypothermia could be a good line for the Leavers. The debate about intermittent generation and costs was excellent, but ignored by the MSM too.
The sugary drinks will of course make no difference, as sugar itself is not taxed and the problem is caused by overeating, lack of exercise and stupidity. According to Michael Mosely in his new book, the diabetes epidemic is caused by the anti-fat advice given previously and we should be eating less carbohydrate and more low GI food. If Gideon wants to make us slim, he should be taxing spuds, rice and bread too.
At least women can feel good when tampering. The EU tax will be used to pay for refuges which they can esape to when being beaten up at home. It may be a better idea for the police to remove the person doing the beating up in the first place. Does anyone else not understand why this is not done?
March 17, 2016
“The sugary drinks will of course make no difference, as sugar itself is not taxed …”
That’s because before 1972 the UK government regarded sugar is an essential which should not be taxed while soft drinks were classed and taxed as a luxury, and when the change was made from the UK’s system of purchase tax to the EEC’s system of VAT it was agreed as a concession that food would be zer0-rated:
http://www.bbc.co.uk/news/magazine-34649495
And I suspect this may be why Osborne is slapping an extra tax just on sugary drinks, on top of the 20% VAT, but has steered well clear of interfering with the zero taxation of sugar or any sugary food, which could cause more complications with the EU to exacerbate the likely domestic political backlash.
March 17, 2016
I watched a representative from the solar industry berating Gideon for this regressive tax. At no point was it pointed out that it was an ECJ ruling
Why doesn’t Dave announce that for the n th time we have been overruled by that place of maximum influence.
March 17, 2016
On the Today program this morning, one of Osborne’s points was along the lines that we all get to sack him because we can vote him out. A cuter or less biased questioner would have immediately pointed out that this is not possible with our rulers in Brussels when we don’t like what they are doing.
Anyway, I’m waiting for the EU to rule in the coming weeks that tampons are exempt from VAT and that this will be trumpeted as proof of the UK getting its way.
March 17, 2016
John…you may not have much in the way of Party support, but you did and do among the British public.
We can only imagine how better off we would have been as a country,had you been the Conservative leader.
There is a vote in June that will affect not only my children and my grandchildren’s future.But the futures of all living under a corrupt and anti-democratic EU federation, for generations.
Whilst the leave campaign is more factual and coherent than the fear pontificated by the remain…..we need a more vocal presence.The political bias of mainstream media services are not a platform..social media is…Twitter,Youtube,Facebook.
Your website is not enough….your personal political career and aspirations may have been harshly thwarted by your party.But here is an opportunity , grasp it.
March 17, 2016
If the govt wish to lessen dependence on fossil fuels they might consider zero rating bicycles.
If the EU don’t like it then declare UDI, repeal the 1972 European Communities Act and politely tell them where to go.
March 17, 2016
There is no more obvious example of the EU delving into every nook and cranny of public life than its interference with VAT rates.
March 17, 2016
One thing the budget highlighted was that the Conservatives are trying to roll back the welfare state but is on the other hand encouraging the nanny state. Wealth creation is still high on the Conservative agenda happily but poor old George is in a pickle. His economic policies are working but the left and the rest of the world are ganging up against him. The lefts gimme remains unabated a nuisance more than anything else but the worlds economic woes are really spoiling his plans. Of course every one is ignoring that fact and blaming him because the forecasts have taken a downwards turn.
Another point to come out of the budget is the fact that stayers are twisting every bodies arm they can to garner support for their cause. The BoE and now the OBR have been dragged in. It will Santa next still we have the Queen on our side.
Do not want him as leader though after DCM at the moment I am for Michael Gove.
March 17, 2016
The more one looks at the sugar tax the more ludicrous it looks. But he has a long record of silly & damaging political gimmicks and tax graps over substance. It show up in the dire trade deficit, the psbr and the dire productivity figures.
Can we have a sensible, numerate, grown up doing the job for a change please.
March 17, 2016
Hear Hear.
March 17, 2016
Off-topic, JR, would it not be possible to devise a series of Written Questions to ministers to force them to say, in broad outline, what the government would do to avert the various disaster scenarios which “could” result from our withdrawal from the EU?
For example, with respect to research funding, could the minister –
a) Guarantee that all existing grant contracts would be honoured, if not by the EU then by the UK government;
b) Confirm that it would it be possible to enlarge direct UK research funding to replace all existing funding through the EU;
c) Confirm the government’s intention that research in the UK shall be adequately funded irrespective of EU membership; and
d) Confirm that the government would actively seek to maintain and develop links between British scientists and their international counterparts across the world?
Of course we know the answers to these points, but surely it would be helpful if the government could be forced to admit them in writing rather than deliberately (and irresponsibly) spreading doom and gloom about what “could” happen?
Reply We are gradually achieving this. The Farming Minister and the PM have confirmed all farmer subsidies would be matched.
March 17, 2016
Very good. We really need accessible references to cite, otherwise we may be accused of just making it up.
On the specific matter of funding for scientific research, there is an article in the Telegraph today:
http://www.telegraph.co.uk/news/newstopics/eureferendum/12196871/Leaving-the-EU-would-risk-Britains-status-as-a-science-superpower.html
in which it is claimed:
“Between 2007 and 2013 the UK contributed about 5.4 billion euros to the EU research budget and received 8.8 billion euros for UK research and innovation, making us the second-largest recipient after Germany.”
Well, even if that is true it doesn’t amount to much in the way of additional funding from other EU member states; 3.4 billion euros over seven years = average of 486 million euros or about £380 million a year.
If we all chipped in £6 per head per year that would make up the shortfall.
March 18, 2016
The DT article could have pointed out that Stephen Hawking may have been right about his black hole radiation but has been wrong about having a theory of everything and lost his bet with an American colleague about the Higgs. Also that the protons whizzing around at near c at CERN are going in and out of the EU very quickly indeed.
My friend who works in research gets money from the US ,the UK and the EU. Some EU projects include univerities in the US and Israel. Scientists work globally and they chose who to work with because of their expertise in very specialised fields.
The research money could easily be made up and the Germans would be mad not to accept our contribution if our universities and theirs had a promising project and wished to work together.
March 18, 2016
The latest news about Graphene is that this British invention is being funded and developed by the Chinese. Where was the EU on this one- possibly one of the most important inventions in 100 years?
March 17, 2016
Of course the Biased BBC would have skipped that detail – normally they would highlight it as a “Tory failure/misogynistic” but in this case the cause is clearly the beloved EU, so no word of criticism will pass.
March 17, 2016
The problem of VAT should be highlighted in the Brexit campaign.
On the radio this morning it was stated that a female Labour MP is to raise the issue of the “tampon tax” in the HoC. If this particular tax was construed in any way to assisting success for Brexit then it would provide a host of justifiable jokes to the Remains.
March 17, 2016
Well raised Mr Redwood, it’s doing the rounds nicely, but we should all expect the BBC and the other pro-EU vested interests and Establishment figures to avoid it and if they can’t then to lie about it. If they do I’m back to wanting to throw bricks through windows.
Reply I was half invited onto the BBC today to talk about VAT but when I told them my view in response to their questions and how I wished to mention the VAT of green products as well as tampons they decided they did not need me!
March 17, 2016
It seems to me that the current government is full of people who have never solved anything, and are totally out of ideas.
Where are the ideas? Where are the solutions? Why aren’t we asking people who’ve actually achieved something? Why don’t we just ask anyone else? Because the people who are doing it now, have comprehensively failed to fix the problems and they’ve had 6 years.
Sure, they’re all smart. They all where £3000 suits. But they haven’t succeeded at anything else, but making themselves rich at the expense of the taxpayer.
etc ed
March 17, 2016
Apparently George Osborn has a black hole in his budget and will need to find another 10 billion either in spending cuts or raising taxes. If we leave the EU he will benefit from at least that amount each and every year so problem solved. Which only shows that actually the UK cannot afford the EU especially as every year it demands even more.
March 17, 2016
This looks suspiciously like someone deciding that there were not enough SavethePlanet eyesores fouling up our urban and bucolic landscapes, heavily subsidised by electricity consumers of which many industrial ones have been forced out of business to subsidise the landowning and home owning troughers. Consequently, an entirely spurious category of ‘energy saving materials’ has been created to bury these aforementioned pieces of useless apparatus.
A central heating system wont work without thermostats and time controls whose cost is minimal set against the cost of boiler installation. Draught excluders, but not double glazing or lined curtains or carpets. Arbitrary and nonsensical except to minimise the loss of VAT on items other than bird chompers and bird conveniences.
However, it should not be the role of the ECJ to override the stupidity of the government; in fact the ECJ should have no role whatsoever in our system of governance, so Brexit and then get rid of the Climate Change Act and the subsidised eyesores.
March 17, 2016
Good news!
Our Chancellor has grovelled in Brussels and as an act of grace the Commission will grant a special “deal” on this. He is “on the verge” of such a deal, it is only days away.
And our Prime Minister will also seize the opportunity to raise it on the fringes of a summit meeting with other EU leaders and the President of the Commission.
http://www.theguardian.com/politics/2016/mar/17/budget-2016-george-osborne-on-verge-of-deal-to-strike-down-tampon-tax
This is the depths to which we have now descended, our Great Officers of State haggling with foreign powers over a ludicrous tax on tampons.
March 17, 2016
If they stopped all these first time buyer incentives (adding to your savings, 20% deposit loan interest-free etc etc) the developers and estate agents would not be able to overprice lower end properties. Once market forces prevail the prices will either stagnate or slowly fall to affordable levels for first time buyers
March 17, 2016
If there is to be a “sugar tax”, why just tax manufactured sugary drinks rather than taxing sugar?
A conjecture, and I emphasise that at the moment it is only a conjecture and I’m prepared for it to be disproved or possibly refined so that it is more correct:
“EU law does not permit any form of national or local purchase tax to be applied to an item which it has been agreed will be zero-rated for VAT.”
Sugar and other foods were considered to be basic items and were not subject to any purchase tax before we joined the EEC, and as a concession it was agreed that they could continue to be sold without tax after we joined the EEC and adopted its VAT system, so they would be zero-rated.
On the other hand soft drinks are not treated as food and are subject to the standard rate of VAT, and the new “sugar tax” would in fact be an additional national tax on top to the VAT.
Any other thoughts, or preferably evidence, on this?
March 17, 2016
“If there is to be a “sugar tax”, why just tax manufactured sugary drinks rather than taxing sugar?”
Of course, orange juice contains more sugar than cola; some people drink gallons of fruit juice, presumably because they like it and believe it prevents the scurvy; however, crucuferous vegetables have comparatively similar amounts of ascorbic acid but higher levels of other nutrients whilst harbouring a quarter of orange juice’s sugar content.
March 17, 2016
This is less to do with the EU, who is happy to accept 5% on fuel, but a failure of the conservative government to make a compelling argument that these measures are analogous to fuel. Blaming the EU for personal failings is a favourite sport of many MPs and our press are complicit in this
March 17, 2016
Why should the UK government be in the position of having to make any case at all before an appointed transnational court, which will then determine a tax rate in the UK rather than that being decided by our elected Parliament?
March 17, 2016
I hope you can indeed oppose this VAT rise and the Feminine hygiene tax. So much for us determining our Taxes – I don’t remember Cameron talking about these impositions in his ‘EU love-in”.
March 17, 2016
“The combination of our action to reduce borrowing this year, along with the revision to our nominal GDP driven by lower inflation, have produced this paradoxical result”. Oops.
Nothing paradoxical if the denominator (GDP) decreases faster than the numerator, the ratio is bigger.
So GeorgeO’s performance was rather poor, Corbyn’s one was largely irrelevant. Questions remain: What will the Leave side do till 2020 in terms of budget? Apart from the EU matters, will they keep the same priorities? a budget surplus by 2019-20? Will the LISA be cancelled before even starting? Will the changes to CGT, personal allowance, higher tax boundary, ISA annual limit be kept? Could we have some ideas of who the candidates for the Chancellor’s position might be?
March 17, 2016
Many thanks for this JR. It actually makes a great Brexit argument on so many levels – showing whose laws we’re governed under, which court judges us, our inability to make our own policies, the EU’s incompetence by being pro-Green and yet having Directives preventing a Green initiative, prices being dictated by the EU, etc, etc.
The comment by the trade body, the Sustainable Energy Association was interesting and very forthright:
“This is an action by the EU Commission of the most astonishing hypocrisy. In one breath, the Commission and the EU Institutions implore Member States to take efficiency and sustainable energy more seriously – yet in the next, they use legal means to try to abolish the very policies the UK has in place to achieve this.”
“This perverse decision will have no impact whatsoever on cross-border trade between the UK and the rest of the EU. It is an epic example of Europe meddling in domestic policy for no trading benefit whatsoever. In fact, it is contrary to almost every principle and policy created to reduce consumers’ energy consumption, cut emissions and help boost economic recovery across the EU.”
[Source: The Sustainable Energy Association – press release.]
March 17, 2016
Don’t forget to have a read the words of the OBR. http://cdn.budgetresponsibility.org.uk/March2016EFO.pdf The words are good, we know, from experience, the numbers won’t be
Particularly, can I draw your attention to “Sectoral net lending” at para 3.116 onwards. Chart 3.39 should worry us all. Read on to the end of Chapter 3.
Household debt (Chart 3.29) has to replace government spending, to enable Osborne to achieve a budget surplus; and, enable UK households to maintain, at the same time, their craving for imports; them BMWs, and them Samsung phones, and them iPads etc etc.
BMW has to be prepared to “save” Pounds Sterling when it brings its cars to the UK, and sells you one of its vehicles, from a UK dealership. Eventually, the Pound will sink in value, in the FX market, to try and balance out the imports into the UK currency area. The exporter will lose exports and German BMW makers will suffer cut backs in production. (The ECB could start buying in Pounds, to force the Pound currency up in the FX market, and keep sales of BMWs up, to the UK.)
This is basic sectoral balance accounting for a fiat currency economy; all sectors sum to zero. The OBR knows it; the ONS knows it; the Treasury knows it. Osborne is banking on you not knowing it. He will be aided by financial / business journalists, in the print media particularly, to make sure you never understand it.
Viva La Tamponista!!!
March 17, 2016
On the ITN news tonight another go at showing us the contempt in which they hold the electorate who they rate as stupid. The newscaster said Cameron had got hold of Juncker about the Tampon Tax and was so shaken he is thinking he is going to allow CMD to cancel it altogether. Just shows what influence we have at the ‘Top Table’ presumably.
So, either it is the law or it isn’t. It seems its only law if Juncker decides it is.
Pathetic.
March 17, 2016
This just goes to prove that CMD and the Europhiles are lying through their teeth saying we remain a sovereign country !
March 17, 2016
“Looking to remain in a reformed EU” and just what are the reforms Cameron hopes to achieve
March 18, 2016
I see he got agreement on one vat tax with in minutes of arriving at the EU meeting.
Like I say you can do any think you like in the EU if you want and if they get upset and take you to court you just don’t pay the fine and also stop the money they fine you out of the money you give them and they stop the money out what they give you back and you take double out of next years payment till they end up with nothing.
Its only a EU court, you do have to pay them, you just take no notice of them and do what you want, every other country break the rules.
So your bad member and get thrown out, so what.
March 18, 2016
We have to be clear on why these rules exist. National governments (not the Commission) agreed to use a consistent VAT system to prevent trade being distorted. The Commission (and the Court) are simply there to ensure these rules are upheld. The EU isn’t raising VAT itself or setting VAT rates. If our actions don’t comply with the system we’ve previously agreed then the Commission/Court will say so – that’s the point in them being there, to make sure everyone upholds their agreement (otherwise the agreement would be worthless).
You can disagree with having a consistent VAT system across the EU – and presumably in that case think the cost of having competition potentially distorted is worth it to be rid of the system – but we really need to stop taking examples like this and spinning odd folktales about unelected Eurocrats “setting our tax policies”. That isn’t what’s happening here and it’s frankly misleading to claim that it is without giving the proper context.
Reply Of course it is an unelected EU authority preventing the UK people and Parliament setting their own taxes!