Guido Fawked - EU Not Raising UK VAT

With Young Dave and his jolly good chaps now returned with a majority, their commitment to giving the electorate a referendum on the UK’s membership of the EU is set to become a reality, and perhaps sooner rather than later. So it is that the Europhobes have begun to spin, with distinctly mixed results: some of the knocking copy is lame, while most of it is very lame indeed. And it will surprise nobody to know the source of the very lamest.

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Yes, the perpetually thirsty Paul Staines and his rabble at the Guido Fawkes blog have joined the No campaign this week in no style at all, as Jeremy Wilson, aka Techno Guido (the one who showed off his lack of technical knowledge when pontificating recently about London’s Underground), has told “EU Forces Government To Renege On Queen’s Speech Promise”. How true is that? Not true at all, sadly.

Here’s Wilson’s spiel: “The government will be forced to back track [sic] on their Queen’s Speech promise not to raise VAT following a European decree. The decision by the Court of Justice of the European Union to ban the UK’s 5% rate of VAT on the supply and installation of energy-saving materials will force the government to raise VAT to the standard 20% rate”. But he had already spun it differently.

He links to another post which opens “The Court of Justice of the European Union has banned the UK from reducing the rate of VAT on the supply and installation of energy-saving materials”, which is not the same thing, before sniping “So we have to tax an industry if it intends to prevent an old lady from freezing to death, but it’s fine to waive the tax if the service is provided as a handout”. Won’t they think about the elderly?

But the actual court ruling gives the game away: this has nothing to do with forcing the elderly to freeze, and nor does it force the Government to raise taxes. The VAT Directive (to which the UK is signed up) “permits the application of a reduced rate of VAT solely to the provision, construction, renovation and alteration of housing which relate to social housing or to services supplied as part of a social policy”.

What it does not allow is cutting the VAT rate for renovating private property - which would give an unfair advantage in what is a competitive market. It would be great for providers of the materials concerned in the UK - they could undercut all their mainland European competitors and clean up! Yes, the Fawkes folks have failed on a matter of basic economics, which tells you all you need to know about their abilities in that area.

On this fortieth anniversary of the last referendum, where the electorate voted by a two-thirds majority to remain part of what was then the EEC, the starting gun has been fired for the next referendum campaign. So there will be yet more of this low-grade propaganda from the Fawkes rabble for another year at least. It’s to be hoped that they will raise their game and make dismantling the spin more challenging.

But, knowing the abilities of those spinning, I doubt that will happen. Another fine mess.