Conservative MEPs have criticised a ruling by the European Court of Justice today banning Britain from cutting VAT on energy-saving materials.
Ashley Fox, leader of Britain’s Conservative MEPs, said the judgment against the UK Government was “unfortunate and unwelcome”.
The infringement judgment from the Court in Luxembourg said Britain was breaching the EU’s VAT Directive by applying a reduction across board in the rate of VAT applied to energy-saving materials for housing.
The judges said such a reduction should only apply to social housing. The UK’s lawyers insisted that a policy promoting housing improvement may produce social effects, but their argument was rejected.
Mr Fox said: “When you consider the importance these days of promoting energy-saving, this judgment is most unfortunate and thoroughly unwelcome. It defies common sense.
“People will be aghast when they see the EU on the one hand hectoring member states about carbon reduction while on the other handing down judgments like this.”
