The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019

Debate between Lord Spellar and Jesse Norman

Monday 24th June 2019 General Committees

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Committee has considered the Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019.

It is a great pleasure to serve under your chairmanship, Mr Robertson. The instrument amends the Value Added Tax Act 1994 to alter the scope of the reduced rate of VAT for the installation of energy-saving materials. That ensures consistency with the 2015 judgment of the Court of Justice of the European Union.

As the Committee will know, this Government are deeply committed to greening our economy and our society and bid fair to be the greenest Government ever. It is of huge regret to us that we have felt compelled to make this change because of EU regulation.

Under current UK VAT rules, a reduced rate of 5% applies to the installation of energy-saving materials such as insulation, solar panels and other technologies in residential properties. Under EU law, it is not possible to remove VAT from those materials, so the reduced rate of 5% applies. The VAT relief aims to lower the cost for consumers and families to install those energy-efficient products in their homes.

In 2011, the European Commission launched an infraction proceeding against the UK, arguing that the scope of the UK’s reduced rate for the installation of energy-saving materials was too wide and needed to be changed. The Government did not agree with the European Commission’s infraction proceeding, so the matter was heard by the Court of Justice of the European Union. In 2015, the Court agreed with the Commission and found that the scope of the UK’s reduced rate for energy-saving materials was indeed too wide.

Under EU rules, the UK is obliged to comply with the decision of the EU Court of Justice. If it does not, the European Commission will be required to issue infraction fines against the UK.

[John Spellar (Warley) (Lab)]

Given that the Prime Minister and others, including the Conservative leadership candidates, say that we are going to leave the EU on 31 October, why is the Minister rushing to comply rather than ignoring this and waiting until then?

[Jesse Norman]

As the right hon. Gentleman will know, it is hardly rushing to respond to an infraction proceeding that began in 2011 and involved a European Union Court of Justice appeal in 2015. While we remain a member of the EU, we are required to obey its laws. When we leave the EU, we will of course be in a position to revisit the issue.

[John Spellar]

I understand the build-up—it always takes this long—but given that Britain may leave the EU in only a few months, why does the Minister feel it necessary to do this now?

Oral Answers to Questions

Debate between Lord Spellar and Jesse Norman

Thursday 5th July 2018 Commons Chamber

[Jesse Norman]

I can certainly confirm that we will be consulting shortly on E10 and that we are looking closely at the issue of fuel labelling, which, as the hon. Gentleman knows, has to be addressed relatively quickly.

[John Spellar (Warley) (Lab)]

Does the Minister accept that what is really needed is an overall, measured, strategic approach to the propulsion mix for vehicles? That will rightly include E10, but it will also include diesel. What has been so damaging to that industry has been the Government’s war on diesel, which has been hugely damaging to our automotive sector, as well as our engine manufacturing.

[Jesse Norman]

I can only salute the right hon. Gentleman’s expertise in crowbarring a question about diesel into exchanges about E10. We are taking a strategic approach. We introduced changes to the renewable transport fuel obligation earlier this year. We have changed the status of the crop cap. We are pushing for the increased use of waste-based biofuels, and we are supporting the introduction of higher-performance fuels in other sectors of the transport world.

Oral Answers to Questions

Debate between Lord Spellar and Jesse Norman

Thursday 13th July 2017 Commons Chamber

[Jesse Norman]

My right hon. Friend has made his point eloquently. All I would say is that the major roads network that we announced last week, along with the bypass fund, is specifically designed to be part of a wider strategy whose purpose is to provide the infrastructure that new housing development requires. That should be part of the solution for any of these schemes.

[John Spellar (Warley) (Lab)]

rose—

--- Later in debate ---

[John Spellar]

Mid Sussex. Does the Minister accept that the road system to Mid Sussex would be considerably improved if money was diverted from the ever-deepening, bottomless pit of HS2, thus enabling those projects to move forward much more quickly? May I join my hon. Friend the Member for Bolsover (Mr Skinner) in calling for a reassessment of this increasingly troubled scheme?

[Jesse Norman]

Mr Speaker, it is a mark of your grace that you were able to allow the right hon. Gentleman to proceed with a question so evidently unrelated to the issue, so much so that he was not able to make it to the actual name of the constituency or the area concerned, although that came in the first 10 seconds of his question. The answer to his question, if I may dignify it with an answer, is that there will be plenty of investment in both sides of that equation.