The House of Commons debated yesterday the Finance Bill, including new clauses on VAT on sanitary protection products. During the debate Bill Cash made the following interventions:
Rob Marris (Wolverhampton South West) (Lab): I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Mrs Eleanor Laing): With this it will be convenient to discuss the following:
Amendment 89, page 4, line 20, leave out clause 9.
New clause 1—VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service—
‘(1) The Treasury shall, within six months of the passing of this Act, publish and lay before the House of Commons a report on the VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service.
(2) The report must include (but need not be limited to) an analysis of the impact on the financial position of Police Scotland and by the Scottish Fire and Rescue Service arising from their VAT treatment and an estimate of the change to their financial position were they eligible for a refund of VAT under section 33 of the VAT Act 1994.’
New clause 2—VAT on sanitary protection products—
‘(1) The Treasury must, within 12 months of the passing of this Act, lay before the House of Commons a report setting out the impact of exempting women’s sanitary protection products from value added tax.
(2) The report must include (but need not be limited to)—
(a) an estimate of the impact on VAT revenue of exempting women’s sanitary protection products; and
(b) an assessment of the impact on the purchase of women’s sanitary protection products of exempting them from VAT, with particular reference to purchasing by women aged under 25.’
New clause 7—VAT on sanitary protection products (No. 2)—
‘(1) Within three months of the passing of this Act, the Chancellor of the Exchequer shall 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.
(2) A Minister of the Crown must 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.’
Rob Marris: I thank the hon. Gentleman for that. We shall shortly be having a discussion about the mechanics of setting VAT in the United Kingdom.
New clause 7 has been tabled by my hon. Friend the Member for Dewsbury (Paula Sherriff). New clause 2, tabled by the Scottish National party, is similar but not as good. It was also tabled in Committee. The greater virtue of my hon. Friend’s new clause—in contradistinction to new clause 2—is that she has carefully listened to what the Government said in Committee about the road map, as we say these days, to achieving this worthy goal. She has worded her new clause in the light of the remarks made by the Minister in Committee, and I commend her for that. Her proposal has gained considerable momentum on both sides of the House, for obvious reasons. Of course, those of us on the Labour Front Bench will support it and I urge hon. Members on both sides of the House to do the same. I will not say a great deal more about the new clause—
Sir William Cash (Stone) (Con): Some of us do have a certain amount to say about it. These are weasel words. The Opposition know perfectly well that they are not going for a full relief, or any relief, and are instead going for a pathetic little report, because of sections 2 and 3 of the European Communities Act 1972. The hon. Gentleman knows it, and we know it. These are weasel words, and the proposal would make no real change.
Rob Marris: I wish no disrespect to the hon. Gentleman, but I am not going to get into a big debate about this subject. It is not a great idea for a man to stand at the Dispatch Box and get into such a debate. On the broader issue of the European Union, it might surprise him to learn that more than half the population of the EU is female. It might also surprise him to contemplate the fact that this measure could be on the shopping list that our Prime Minister takes to Brussels, and that it could gain considerable support—from the Chancellor of Germany, Mrs Merkel, for example.
Sammy Wilson: Does the hon. Gentleman not see the contradiction in saying that the Government should be looking for ways to encourage high-intensity energy users to use more renewables, which are three times more expensive than producing electricity from gas, while lamenting the decline in energy-intensive industries in the UK?
Rob Marris: I disagree with the hon. Gentleman. The difficulty is that we have high energy prices because we have not invested in new technology to bring them down. For example, if we had cracked the holy grail of carbon capture and storage on a commercial basis—it is already cracked on a scientific basis—this country would be quids in, because of all the coal we have.
Sir William Cash: The short response to what the hon. Gentleman is saying is that massive subsidies deployed in other countries are being authorised by the European Commission, but we do not get them. As the hon. Member for East Antrim (Sammy Wilson) said just now, there is an increasing failure in renewable energy because it is too expensive and the subsidies are a complete disaster zone.
Sir William Cash: I do not think new clause 7 is strong enough. It just asks for progress. We are not doing enough. Let me explain why.
The hon. Member for Wolverhampton South West (Rob Marris), who presumably helped to draft this proposal, knows perfectly well that he is trying to find a way of satisfying those who would like to see a serious attempt made to reduce the VAT on these products. They are clearly necessary and the tax on them should be reduced in the way that has been proposed. Unfortunately, however, he also knows that because of sections 2 and 3 of the European Communities Act, it is impossible to do that without getting the agreement of all the other member states. There is a variation as between other member states and ourselves to the advantage of those states, the net result of which is that supporters of new clause 7 are not going to get that agreement and they know it.
I am completely on the side of those who want to see a total elimination of VAT on these products.
Stella Creasy: I note with pleasure the hon. Gentleman’s support for the idea that tampons, as they are called, and sanitary towels are an essential. I am an avid follower of many of his debates in Parliament, and I know that he has raised concerns before about the European Union. Having discovered his support for this proposal, I wonder whether he can update us on when he last raised in this House the issue of VAT on tampons.
Sir William Cash: I am not going to say that I did, but I put through an Act of Parliament, the International Development (Gender Equality) Act 2014, both to protect women and to promote their interests, with massive support from all parts of the House, so I want no suggestion that I am backward in coming forward on these issues.
New clause 7 contains weasel words. It does not solve anything. It is not in the interests of the United Kingdom not to deal with the problem properly.
Kate Hoey (Vauxhall) (Lab): I have raised the issue over a number of years, and I am pleased that we are debating it tonight. Does the hon. Gentleman agree that this is one of the ridiculous things that the European Union does, and that we need to get back in our own country control of how we levy VAT, which is why we should vote to leave the European Union?
Sir William Cash: I entirely agree with the hon. Lady’s last remark, for the reasons that she has given. We need to get back control over our own power to make laws, levy taxation and deal with all the matters which we do not need to go into today. The supremacy of this House affects tax, spending, and the way in which we run our own country. We have a right and a duty to return to the people of this country the right to govern themselves. This happens to be an extremely good example of the kind of thing that would help women in a way that I would much like to see.
Stella Creasy: I am pleased to hear the hon. Gentleman talk about his concern for global gender inequality, and his support for the idea that tampons are an essential and therefore should not be zero-rated. There is another way to read the amendment, is there not? Were we to pass it and to propose these matters at the European Union and secure zero-rating on tampons across the whole EU, he would be showing solidarity with his sisters in France, Belgium, Germany, Italy—indeed, he could be helping many more women by supporting zero-rating across the European Union.
Sir William Cash: If there were a cat in hell’s chance that we would get this through the European Union, I would entirely endorse the hon. Lady’s sentiments. I would like to see the changes. The problem is that everybody on the Opposition Benches and the Government know quite well that they are not going to be able to achieve that with the kind of progress report that is mentioned in the new clause. It would be a great opportunity now to propose a provision that would override European law to make sure that we could achieve the objectives that she and I clearly share.
Stella Creasy: I thank the hon. Gentleman for giving way again. I do not want to pursue this, not least because I am avidly waiting for the speech from my hon. Friend the Member for Dewsbury (Paula Sherriff), which I think will be compelling, but may I give him a spark of hope? It is not just on these shores that there are women—and men—fighting for zero-rating on tampons; there are others doing so in France. The proposal was put forward just this summer. Should he choose to vote with us and support the new clause, he will be joining many people across the European Union. I want him to have hope that we can win this at the European level, rather than the despair that he currently feels.
Sir William Cash: My final remarks on the issue are these: that is wishful thinking. What is needed is not a report, but action—action to return to this Parliament the right to determine its own levels of taxation. I regard the proposals in the new clause as aspirations without substance, yet I agree with the underlying principle, which can be implemented only by an effective legislative change to the Finance Bill, whereby we take back control over our own affairs and govern not only the men but the women of this country in the way in which they would like.
Paula Sherriff: I completely agree that homeless women face enough challenges without the added burden of periods without sanitary products.
Some great work is being done by food banks, and student unions, such as those at Leeds University and Sheffield University, have started selling sanitary products at cost price in order to avoid VAT, but this is an issue where the Government need to lead from the front. The Minister told us in Committee that he was sympathetic to this, but we do not need to be patronised with tea, sympathy and platitudes; we demand action. He told us that his hands were tied and that change would require difficult negotiations and EU reform, but the Prime Minister has just promised us that he will undertake just such negotiations, and that he will be able to deliver just such EU reforms. This issue, which affects the majority of people across Europe, could hardly be more difficult to achieve than the rest of his demands.
Frankly, VAT on tampons is the vagina added tax. It is a tax on women, pure and simple. Therefore, instead of going to Brussels to water down our protections at work, the Prime Minister has an opportunity to deliver a victory for women across the continent. This issue transcends party politics, and I am pleased that the amendment has received cross-party support, from other parties on the Opposition Benches and from some Members on the Government Benches. I sincerely hope that Members on both sides of the House will support taking steps to axe the tampon tax tonight.
Sir William Cash: The hon. Lady refers to people across Europe, no doubt meaning the European Union. The only problem is that if we cannot get unanimity among all member states, we will not get any change at all. From that point of view, the most important thing is to fight and fight again to ensure that we get what we want, but also to guarantee that we bring back the powers to this House.
Paula Sherriff: I am not sure whether the hon. Gentleman is suggesting that we should do absolutely nothing about this huge inequality that affects more than half the population. We have an opportunity to take a significant step forward for women and families this evening. We turned our clocks back on Sunday. Let us not turn them back even further tonight, period.
Sir William Cash: Surely what this really boils down to is that the European institutions intend to—and actually do—tax women on these products in order to get the money to run the very system that is discriminatory.
Mr Jenkin: Our problem with the EU’s VAT directives is that they are a one-way street. Once the EU has adopted powers to regulate a particular tax, that power cannot be taken back by the member states. We are then left begging the EU as to whether we can set the tax rates for which the British people vote, as opposed to setting them ourselves. It strikes me as ironic that the Scottish National party wants independence from the United Kingdom in order to do its own thing, but it is happy to go on giving up more and more power to the European Union, so it will have even less freedom and less voice than it has in the UK.
The problem is that once VAT rates on any product are set above 5%, the European Union does not allow any member state to reduce them to below 5% again. We therefore have an anomaly whereby there is a zero VAT rate on sanitary products in the Republic of Ireland because it has never charged VAT on them. Had we started from the principle of charging no VAT on sanitary products, we would be in the same position as Ireland, but because we already charged it we cannot take it away. What a mess.
Sir William Cash: In 1993 we were conducting the entire Maastricht referendum in order to get the results that the hon. Lady wants on this particular matter. At that time, we realised that if we did not sort out the European Union properly, we would never get the kind of equality that she is now demanding.
Stella Creasy: The idea that if we do not ask a question we shall never find out the answer is an issue that is on point tonight, and one reason why this eminently reasonable and sensible new clause should garner support from across the House. This debate has not happened at the European level, and, given what happened 20 years ago, my point is that when we ask such questions and challenge people, we can be amazed at the results we secure.
This debate is not about VAT or even the European Union. I recognise that the hon. Member for Wycombe was too young to take part in the vote to join the
European Community, but my point in mentioning the purchase tax is that it is a bit of a red herring to think that this is about the European Union. Tampons and sanitary towels have always been considered a luxury. That is not by accident; that is by design in an unequal society in which the concerns of women are not treated as equal to those of men. Even if we were not in the European Union, there is every possibility that a purchase tax would be applied to sanitary towels and tampons but not to other products.
Sir William Cash: Will the hon. Lady give way?
Stella Creasy: Go on then.
Sir William Cash: The International Development (Gender Equality) Act 2014 was nothing to do with the European Union. Some of us believe passionately in the same sorts of arguments that the hon. Lady is putting forward, and that is by no means exclusive to issues of the European Union.
Sir William Cash: With respect to the question of sanitary towels and tampons, may I simply make this point? I recognise that the hon. Lady really knows what she is talking about, so I would like to know whether, in her experience, there is a similar problem internationally, outside the European Union, that perhaps comes from international organisations? Could she please explain whether there is anything in that?
Stella Creasy: And people say that progress cannot be made in this Chamber or that there cannot be cross-party agreement! The hon. Gentleman is absolutely right. In fact, 10% of girls in Africa do not go to school when they have their periods because they do not have appropriate sanitary protection, so he is right to be concerned about this. What I am saying—let us see whether we can tempt him to make further progress—is that feminism should be without borders; in which case we should be concerned about inequality in the tax rates and VAT that our sisters pay in a range of countries, including those in the European Union.(…)
Mr Gauke: 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 states. Without 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.
Sir William Cash: 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.
Mr Gauke: 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.