MPs reject 'tampon tax' challenge in Commons vote

MPs have voted against a move to compel the government to cut tax on sanitary products, dubbed the "tampon tax" by campaigners.

The Finance Bill amendment, which would have forced a negotiation with the EU for a reduction in the 5% VAT rate, was rejected by 305 to 287 votes.

HM Revenue and Customs (HMRC) says the VAT rate charged on the items is the lowest allowed under EU law.

The government said change would need the agreement of every EU member state.

Financial Secretary to the Treasury, David Gauke, said during the debate that the government "sympathises [with] the aim of this clause" but said: "The UK does not have the ability to extend unilaterally zero rating to new products."

He said he would raise the issue with the European Commission and other EU member states.

Labour cut the rate when it was in government from the then standard rate of 17.5% - imposed in the 1970s - to the lower rate of 5%, but was prevented from going any lower by the European rules.

A petition calling for a change in the law has more than 250,000 signatures.

'Absurd'

Labour MP Paula Sherriff's amendment, backed by shadow chancellor John McDonnell, would have required Chancellor George Osborne to publish, within three months, a strategy for negotiating an exemption with EU institutions.

One of the Conservatives supporting the motion, Bernard Jenkin, said the situation was "an example of where the EU has taken over jurisdiction over our tax where it should not have".

SNP MP Alison Thewliss added: "It is absurd that while men's razors, children's nappies and even products like Jaffa Cakes, exotic meats and edible cake decorations are free from VAT, women are still having to pay additional costs on what is already an expensive yet vital product."

'Not achievable'

A Treasury spokesman said: "The UK has set the VAT on sanitary products at the minimum rate permissible under EU rules."

Any change would require a European Commission proposal and the unanimous agreement of all 28 member states.

Asked about the calls for a zero VAT rate, the prime minister's spokeswoman said: "What is being proposed is not something that being looked at we think is achievable."