Finance Bill

Bernard Jenkin Excerpts

Monday 26th October 2015 Commons Chamber

[Alison Thewliss]

As I suspect the hon. Gentleman well knows, the Scottish Parliament does not have jurisdiction over this matter, but the SNP feels sufficiently strongly about it that we put it in our party manifesto for this place, and the First Minister has been vocal in speaking out in support of zero rating for sanitary products. We would very much like this to happen, and we will give any support that we can in the Scottish Parliament as well as from our Benches here.

This issue has been very protracted over many years, and this House cannot resolve it alone, but we can make a start. VAT has already been reduced by a previous Labour Government, and we have a good deal of cross-party support here tonight. I think that we can do much better than the Prime Minister, who, during the election campaign, described this as a “difficult” issue and said that he “can’t remember the answer”. The answer, of course, is that we can take a lead on this. In June 2015, the European Commission, which is yet to have a female President—perhaps that would make a difference on such issues—gave an answer that was not entirely positive. It set out the background to its reasons why this cannot be done, but it also said:

“As part of its upcoming work on a definitive VAT regime based on the destination principle, the Commission will assess the functioning and possible improvements to the system of reduced rates.”

So we have an opportunity to get involved in this debate to say that this is an important issue for us as a nation and for women across Europe.

We have an opportunity and an obligation to try again to resolve this issue. Members may not know this, but the Republic of Ireland entered the European Union at the time of a 0% rating on sanitary products that it was able to retain in much the same way as we have derogations in different areas, so there is already a precedent within the EU of a zero rating in a European member state. I urge the Government to take a lead on this for women across these islands and across the EU. Let us end this bloody unfairness.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

This debate is like history coming back to me, because not only does the hon. Member for Glasgow Central (Alison Thewliss) now represent the constituency that I stood for in 1987, but I was first made aware of this issue by the hon. Member for Walthamstow (Stella Creasy), who, when she was an A-level student in my constituency, berated me for the inequality of this tax. Ever since, I have been convinced that it is an unjust tax. Indeed, on that occasion I raised the matter in the shadow Cabinet, which was then under the leadership of William Hague. I got a very frosty and uncomfortable reception for raising such a matter in a semi-public meeting, including from some of our right hon. and hon. Friends who are female and hold extremely senior positions in Government to this day.

That demonstrates an important point about how attitudes change. Whatever we might have agreed to in our original agreements with the European Union that lock this tax in place, albeit reduced by the previous Labour Government to the minimum of 5%—I celebrate that—we are now, within the European Union, operating in a system based on a different principle—the principle that taxes should be harmonised as part of the single market. I refer the House to article 113 of the treaty on the functioning of the European Union, which says:

“The Council shall, acting unanimously…adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.”

So taxation has crept into the idea of being part of the single market. At the point at which this country signed up to the Common Market, or even at the stage of the Single European Act or of the Maastricht treaty, this principle crept into the acquis communautaire of the European Union rather than being something that was expressly agreed by this House.

I very much hope that the Government will negotiate something fundamental on this particular tax, and I am looking forward to what the Minister has to say about it. However, I make no apology for raising the far more general principle that different taxation regimes in different countries represent different social settlements and the development of our societies in different ways at different paces. That is why we are separate nations and separate peoples with separate democracies.

The attempt to use the pretext of the single market to harmonise taxes is one of the most democratically regressive manoeuvres the European Union could adopt. France puts VAT on food and children’s clothes, but this country would not put VAT on such items. Ever since we adopted the cheap food policy following the abolition of the corn laws in the 1840s, that has been part of the fabric of our social settlement. It is the right of an individual nation state to continue to evolve its social settlement, and the conduct of Government and the imposition of taxes are inseparable from that democratic social settlement.

The treaties as currently formulated are a denial of national democracy. This House should not have to go and beg 27 other member states in order to change a rate of tax on an issue that we think is socially important. This is a matter of national democracy, and that is why the treaties are unfit for purpose.

[Mrs Main]

My hon. Friend is making a powerful speech. If we were to negotiate and were met with an immovable force, we would be forced to enshrine this unfairness because the European Union dictates that we should do so. We are not allowed to remedy it.

[Mr Jenkin]

That is absolutely correct. Having observed the history of 40 years of membership of the European Union, as it is now called, we know that it is not going to stay like this. The European Union will continue to develop. The trend of taking more taxation powers away from the member states, in the name of the single market, is enshrined in article 113, so it will continue to do so. Yes, we have a veto, but the European Court of Justice tends to accelerate the pace of tax harmonisation just when we do not expect it to do so. It is the ECJ that extended VAT to certain items and categories of goods when we did not expect it to do so.

The group of amendments also addresses the renewables obligation incentives and seeks to adjust the feed-in tariff regime. Why are we able to reduce taxation on renewable energy products to only 5%? It is because of the European Union. Why could the previous Labour Government not abolish VAT on fuel, which they said they wanted to do after it had been applied by the Major Administration? It is because of the European Union.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I agree with everything my hon. Friend is saying, although I am slightly alarmed by his statement that the shadow Cabinet is a semi-public meeting.

Surely the harmonisation of tax fails on two fronts. First, different countries treat these products at the higher rate, the lower rate or at no rate. Secondly, on equality of treatment, is my hon. Friend able to think of any other product that is taxed so discriminately that it affects only one half of the population of the European Union, who just happen to be women? Is that not the most discriminatory and iniquitous measure that the EU has come up with?

[Mr Jenkin]

My hon. Friend makes an interesting point and raises the spectre of a case to bring before the courts—perhaps even the European Court of Justice—on the basis of discrimination. Perhaps that would be one way of resolving this particular problem.

I am shamelessly using this example as an opportunity to make a far broader and more important constitutional point.

[Hannah Bardell (Livingston) (SNP)]

I am glad the hon. Gentleman has admitted to his own shame, because it seems somewhat shameful to fudge the issue. We may not have all the powers to change the situation, but this House has an opportunity to send a clear message to Europe on something that is very wrong and about which so many people feel strongly. I cannot believe that the hon. Gentleman is using that as an excuse to not support us on an issue for which there is clear cross-party support.

[Mr Jenkin]

I point out to the hon. Lady that my name is on new clause 7. I support it, but I will wait to hear what the Minister has to say before deciding whether to vote against my own Administration. I am sure she will understand that. There have not been many rebellions among the SNP yet. The point about being a political party in this House is that we are all individuals and we are all allowed to do what we choose. In fact, that is our responsibility.

[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.

[Jess Phillips (Birmingham, Yardley) (Lab)]

I wonder whether the hon. Gentleman recognises all the good things the European Union has done for women. As somebody who has had to suffer periods and pay this unfair tax, I was also afforded maternity rights that I would never have had if it had not been for some of the pressures exerted by the European Union.

[Mr Jenkin]

I certainly acknowledge that what has happened in other member states has influenced what has happened in this country, but the hon. Lady enjoys no rights in this country that we could not have afforded ourselves through our own political processes. The question of the possibility of leaving the European Union is about taking back control over those policies, not deciding them in a different way from that which she would like. Long may we continue to agree on the importance of equal rights for women in as many areas as possible—in fact, in every area that we can possibly legislate on.

[Pauline Latham (Mid Derbyshire) (Con)]

Does my hon. Friend agree that this tax is very unfair because it is not about the equality of sexes? The tax is not equal because men do not need any of these products. If we had thought at the very beginning that this would impact on women only, I am sure people would have thought much harder about putting tax on sanitary products, which every woman, mainly, needs for a long period in their life. It is not fair.

[Mr Jenkin]

I entirely agree with my hon. Friend. It is a deeply discriminatory and unfair tax.

[Wes Streeting]

rose—

[Mr Jenkin]

I am not going to give way again.

I congratulate the hon. Member for Dewsbury (Paula Sherriff) on tabling new clause 7. She may be a little surprised at how many Members support it, but, sadly, we have to have this debate not because it is the British Government’s policy to levy the tax, but because it is the EU’s policy to do so. That is a fundamental freedom and control that we should bring back to this House in the future.

[Jess Phillips]

I feel the need to make all sorts of declarations of interest in this debate, having used sanitary products pretty much all my life.

I wish to pay credit to a number of women who have brought this subject to the House over the years. Without women in this place, I am certain that this issue would never have been raised, although I am delighted that so many men interested in Europe are in the Chamber to talk about it. Dawn Primarolo, a working-class woman brave enough to dare to speak up in Parliament about the taboo subject of women’s periods back in the year 2000, should be commended.

Today, when such topics are far easier for us to discuss, I have already received a number of sideways glances from colleagues around the estate on speaking about the subject and there is a certain desire among Conservative Members to say the word “products” instead of tampons. I know from speaking to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) today that, at the time, it was considered vulgar and even shameful that Ms Primarolo brought forward the subject. She was brave. Today, our brave woman prize goes to my hon. Friend the Member for Dewsbury (Paula Sherriff). Regardless of what has been said on the other side of the House, doing nothing achieves nothing.

It is completely ridiculous that women are taxed, even at a 5% rate, for a product which, in my experience, is more than essential. The fact that we still have the tax is probably down in no small part to the fact that most of the people in the House and in our sister Parliaments all across the EU do not have wombs. The reason why we must force the Government to have a conversation with our European partners is that, without force, I fear that they will be too squeamish to talk about women’s periods. But they should not be: every person in the House exists only because their mother had a period. Today, with half term, Parliament has been teeming with children—my own have been on the slides in Portcullis House—who all exist only because their mothers had periods. It is nothing to be scared of, and nor should any man or woman ever feel that we should not talk about periods.

Such a revision in taxation may seem a marginal change, but it would make a huge difference to the women in this country. Having worked in a women’s refuge, I know that the things we had to stock up on the most—because they presented a challenge to the budgets of the women in our care—were nappies, tampons and sanitary towels.

--- Later in debate ---

[Stella Creasy]

I will come on to issues of gender and equality on an international level, but I give the hon. Gentleman warning that I will not take any more interventions from him unless he uses the terms “sanitary towels” and “tampons”. It is important to use appropriate wording in the House.

The inequality that women have faced in having to pay this tax has existed for generations. The question for us all is what we can do to change that, which is why I add my name to those who have congratulated the former Member for Bristol South, Dame Dawn Primarolo. She is a hero to many of us for her persistence in fighting to reduce the rate of VAT on sanitary towels and tampons in the European Union in 2000. I have talked to her at first hand about those negotiations—she had to use the appropriate terms and explain that if we did not resolve this issue, men and women could be sitting next to each other, with women experiencing their periods and the difficulties that can come from that, but without that same protection because of the cost of these products. Her work was visionary.

Talking to Dame Dawn Primarolo, it became clear that this is not about VAT rates but about VAT descriptions. I am looking forward to hearing what the Minister has to say about this, because there is common agreement that we wish to resolve this issue and a recognition that in 2015, a tax on women—a femitax, a vagina tax, or whatever we want to call it—is unfair. The issue can be resolved not necessarily by considering VAT rates, but by considering the way that VAT is described and ascribed to certain products. That is where the inequality has come from—the concept of what is a necessity.

[Mr Jenkin]

rose—

[Stella Creasy]

I will of course give way to the hon. Gentleman. It is like 20 years ago.

[Mr Jenkin]

I do not remember the hon. Lady giving way 20 years ago. She was at the very fine Colchester county high school for girls, which is a grammar school. In parenthesis, I am delighted that, through the reforms we are pursuing, this Government are doing more for educational opportunities for the least advantaged than any Government in living memory.

Why does the hon. Lady think that Dame Dawn Primarolo was unable to remove the 5% VAT on tampons and sanitary towels when she succeeded in reducing the things that we had discretion over? Why did she not take this initiative to the European Union? It was because she found that the Government of the day felt that they had other, more important fish to fry in their negotiations with the European Union. We should get away from such an unsatisfactory give and take to national interests by leaving the European Union.

[Stella Creasy]

I thank the hon. Gentleman for mentioning the school that I attended. I was incredibly lucky to get there, having failed the 11-plus the first time I took it. I shall always be against selection because I recognise the benefits that I received from being able to take that exam a second time and get that education. That school taught me to do my homework, which is why I know that one of the rules and challenges of this issue is that zero-rated VAT is different from reduced rate VAT. At the time, Dawn Primarolo found that the issue was not about unwillingness but about the way that the rules on what a zero-rating—as opposed to a reduced rating—could be applied to had been changed. That is why she was able to secure a reduction in VAT to 5% from 17.5%—I am sure that the hon. Gentleman will agree that that was progress—but this issue is about the way that products are described.

I am sure that the Minister knows his history of value added tax, how a product is described and what is described as a “necessity”. It is important to have a concept of what is currently described as a “necessity” and is therefore zero-rated. I wonder whether Conservative Members will agree that when we change these definitions, progress can be made.

For example, Jaffa Cakes are zero-rated. I am not a fan of Jaffa Cakes—let it be known that if I am offered a Jaffa Cake, I will refuse. I do not consider them to be essential to my life; I can give or take them. I recognise that razors are zero-rated, and judging by many Conservative Members the opportunity to shave every day is a human right. They are cleanly shaven, and I am sure they would be concerned to be charged a higher rate of VAT. Pitta bread is zero-rated—we can probably all agree that that is a necessity. What is the kebab without a good pitta bread around it? It is a necessity. When we start looking at what is described as a “necessity” and what is a “luxury”, we see the inequalities in this debate. As I said earlier, those inequalities existed long before we joined the European Union and long before we started to work on value added tax.

The question for all of us is not how to have similar rates of taxation, but how to recognise the similar descriptions. That is the way that this issue can be resolved in the European Union. It is also why working with our colleagues in other countries matters to us. I come back to the concern expressed by the hon. Member for Stone about gender inequality, because he is absolutely right: our sisters in France are paying 20% on their tampons and sanitary towels because they do not have the reduced rate. This is therefore not about sanitary towels and the rate of taxation across the European Union; it is about the way in which different countries have interpreted the concept of necessity and essentials.

--- Later in debate ---

[Craig Mackinlay]

I certainly hope his visits around various European capitals have an awful lot on their agenda. Following today’s debate, I hope this issue will be one such item. The issue is one of exclusivity in setting VAT rates on products important to us in this place, not elsewhere.

[Mr Jenkin]

In response to the hon. Lady’s intervention, is not the point that there are so many issues we want our Prime Minister to raise in the European Union? There is an increasing number of myriad issues, such as how much contribution we make, the free movement of people and how we control our borders. It is these little things—I say “little” mistakenly, because of course it looms large as an equality item in our minds—that get set aside in favour of other things. This is a rotten way of running a continent.

[Craig Mackinlay]

I agree with my hon. Friend. I hope progress can be made on very many areas, not least on this one.

We should not be like a colony pleading with an empire power. This is clearly a rate that should be set here. I thank again the hon. Member for Dewsbury for raising this issue, which, important in itself, has opened a Pandora’s box on who governs this country.

--- Later in debate ---

[Wes Streeting]

In this as in other respects, I have always favoured a woman’s right to choose. It is, of course, for women to decide which is the appropriate form of sanitary product. My hon. Friend is quite right that the moon cup does indeed have the environmental benefits that she mentions. I was glad to add my name in support of new clause 7 proposed by my hon. Friend the Member for Dewsbury (Paula Sherriff), which would tackle this issue. I am glad to see so much cross-party support, but I am disappointed to hear some of the language used this evening about our partners in Europe.

Apparently, according to the hon. Member for Harwich and North Essex (Mr Jenkin), this is the most iniquitous measure that the European Union has put in place. No wonder there is such representation in the Chamber. I hope that the Out campaign is not going to be predicated on VAT on sanitary products, as proponents are likely to find it a struggle to get wider traction. I find it objectionable that so many Conservative Members talk about negotiating with our European partners as “begging”. It is no different from our constituents coming to lobby us and having a reasonable conversation with us. If this is how the renegotiation strategy is going to work, we really are in trouble as a country.

[Mr Jenkin]

I do not know about the hon. Gentleman, but I am here because I had to stand in an election and my constituents have the right to vote me out. How can people vote out the European Union except by voting to leave in a referendum?

[Wes Streeting]

Well, we have the European Parliament and the Council of Ministers, which are accountable to their respective Governments and, of course, the Commission itself is in many ways accountable. I would like to see reforms to some of the accountability mechanisms, but as the old saying goes, “you’ve got to be in it to win it”. On Europe, as on climate change, inheritance tax and the debate taking place in the other place on tax credits, we have seen in virtually every clause debated this evening that this is not the new modernised Conservative party; it is the same old right-wing Tories. They have hung their Chancellor and Prime Minister out to dry, and I hope that the Opposition’s reasonable, centre-ground amendments will be supported by Members from all parts of the House.

--- Later in debate ---

[Mr Gauke]

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.

[Mr Jenkin]

rose—

[Mr Gauke]

I will take one more intervention, but I am conscious that I should allow the hon. Member for Wolverhampton South West to respond.

[Mr Jenkin]

Why is it the policy of the Government to argue that it is necessary to have any tax harmonisation in the EU in order for us to have trade with the EU?

[Mr Gauke]

Doing full justice to that question in the five minutes available for me and for the hon. Member for Wolverhampton South West would be a challenge. This has been part of the VAT regime since 1973, but on this specific area, as we have heard, time has moved on and it is right that we look again at it.