Tory MPs rebel against Osborne on solar tax

At least 17 Conservative Party MPs are backing Labour’s move to block a tax increase on solar panels and other energy saving measures. They have signed up to the Opposition’s […]

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By Priyanka Shrestha

At least 17 Conservative Party MPs are backing Labour’s move to block a tax increase on solar panels and other energy saving measures.

They have signed up to the Opposition’s amendment which would stop a VAT hike from 5% to 20% which was initially proposed last year.

It followed the European Court of Justice’s ruling the UK’s lower rates were illegal under EU law.

One of the Tory Eurosceptics John Redwood MP wrote in a blogpost: “I for one will be opposing this measure as I do not wish to see energy conservation taxed in this way and object strongly to the erosion of our taxation powers by the European Court. It will be interesting to see who will vote with us in opposing this needless and undesirable tax increase.”

According to the Solar Trade Association (STA), the move could add £900 to the cost of a typical 4KW solar installation, which is currently around £6,400.

Chief Executive Paul Barwell said Parliament is “right to recognise a serious problem with the government’s treatment of solar power”.

He added: “Of course we understand there needs to be good cost control and we are very happy to work with government to achieve that. But Government has gone to extremes; slashing support under the Feed in Tariff by 64% for rooftop solar and removing all support for larger projects from this April, leaving much of the industry in limbo.

“There is now huge consensus across the energy industry, both at home and internationally, that solar sits at the heart of a modern power system.”

However reports claim Chancellor George Osborne, who didn’t mention the proposed hike in his Budget speech, could be making a U-turn.

A Treasury spokesperson told ELN the reduced rate “remains in place and unchanged” until the outcome of the consultation.