Eurosceptic Conservative MPs could join forces with Labour to block an increase in taxes on solar panels and other energy-saving products ordered by the EU.
At least 25 Tory MPs are expected to support a Labour amendment to next week’s Finance Bill, seeking to exclude products such as roof insulation, solar panels and domestic wind turbines from 20 per cent VAT rates.
The current five per cent rate is set to be increased after the European Court of Justice ruled last year that the UK’s lower rate was in violation of EU tax rules.
Treasury estimates indicate that the tax hike could bring in £65m a year, but Labour’s Shadow Energy and Climate Change Secretary Lisa Nandy said that, coming on top of Government cuts to other investments in green energy, could “destroy thousands of jobs” and claimed that reversing it was “well within the Chancellor’s power”.
The vote on the amendment would see Labour lining up alongside Eurosceptic Conservative MPs seeking to highlight the extent of EU influence over UK law.
Tory MP James Cleverly told the Independent that despite backing the Leave campaign he would be unlikely to vote with Labour. However he said the issue, alongside a similar clash over the ‘tampon tax’ could win new supporters from the green movement to the Leave cause.
“As this debate goes on there are going to be a lot of people who are passionate about particular issues will realise we can prevented from taking action in many cases because our membership of the EU prevents us from doing this,” he said. “A lot of people who thought the EU debate was a cut and dry issue will realise how many facets there are to this argument.”
