I’m glad you raised this issue, mikey. As always, all is not quite as it seems. The headline seems to suggest that the Westminster Parliament (ostensibly in control of the UK’s tax affairs) is making a decision that should rightly be within its bailiwick:
“At least 12 Tories are backing a Labour motion opposing any rise in VAT charged on solar panels, wind turbines, draught installation and energy-saving devices. “
However, this is not so. You have to read on:
“The current 5% rate paid by benefit claimants over 60 was ruled illegal by the European Court of Justice in June. In the wake of Wednesday's Budget, UK officials said EU leaders had agreed a deal to allow the UK to scrap the so-called "tampon tax", the 5% VAT rate on women's sanitary products which campaigners have long wanted to reduce to zero.
Eurosceptics have long been critical of rules in force since the early 1990s harmonising VAT rates across the EU, arguing they undermine national sovereignty and the right of member states to set their own tax rates. And this is why:
“The UK and other EU members cannot levy sales tax at less than the standard 15% rate except on specified items. For these approved products and services, countries have the scope to charge VAT at a reduced rate of no less than 5%. The UK has long applied a 5% rate to the installation of domestic energy-saving products for anyone over the age of 60 who is unemployed, disabled or claiming benefits such as income support or housing benefit.
But last year, the European Court of Justice said this was a breach of EU laws as the products and services concerned did not fall within the VAT directive which only exempts the "provision, construction, renovation and alteration of housing as part of social policy" and the "renovation and repairing of private dwellings".
So the Tory rebels are not really all that concerned whether householders pay 5% or 20% VAT on their solar panels. They see this as an ideal opportunity to highlight the fact that the UK is not in charge of its own affairs and never will be whilst it remains a member of the EU.