Reduced rates of VAT on the way? UK Prime Minister Gordon Brown, speaking at a joint press conference with French President Nicolas Sarkozy, Paris, July 20 2007
23/07/07

"Today we talked about a European initiative that we believe could send out a very important message about what we think about pollution and about what we can do to make for a more energy efficient and environmentally friendly continent. And we will together, both our Finance Ministers, propose to the European Commission that it is now time and it cannot wait much longer that we give new incentives for people who are wanting to buy environmentally friendly products and make it clear that we are prepared to favour these in preference to environmentally unfriendly and wasteful products for the environment.

And our proposal that we would have reduced rate taxation on VAT, on Value Added Tax, for environmentally friendly products from fridges to insulation, for all the major goods that may pollute but actually by being produced in a way that are environmentally friendly can actually benefit the environment is one that we hope all other European countries will support.

We will determinedly push this proposal forward, both in the European Commission and the European Council of Finance Ministers. And I believe that when we are looking at the environmental debate of the future, the contribution of science, the contribution of public investment, the contribution of new market mechanisms, including tackling carbon emissions through carbon trading, that the reduced taxation that we propose will be a major incentive for people to show personal responsibility in buying products that are environmentally friendly."

Excerpt from Council of Ministers decision, June 17 1998

“The Council emphasises the importance of actively promoting energy efficiency. In this context, it invites the Commission to consider introducing proposals for differentiation in tax levels for energy-saving products, so as to allow member States to provide appropriate economic incentives for such products.”

EuroACE is hoping that this time , the Commission actually takes up the invitation.