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13 November 2015updated 09 Sep 2021 2:27pm

How the Treasury could end the tampon tax

If the government really cares about women’s health and isn’t just using the campaign against the tampon tax for cheap anti-Brussels headlines, there’s a simple solution.

By Richard Nicholl

There are moments in politics when one has to step back and wonder how we got here. This week, angered with the ongoing “tampon tax” of 5 per cent on sales of sanitary products, two women protested outside Parliament by accompanying their placards with a spot of “free bleeding”. This, a once-obscure practice, was popularised as an anti-feminist hoax by the predominantly male users of the internet hate machine 4chan. When tactics cross from the armpit of the internet to the mother of parliaments, something very unusual has happened in politics.

Free bleeding in Parliament Square is all the more peculiar because of the limited ability of the British government to do anything about it. For the Treasury to reduce the VAT rate to zero would be illegal under EU tax law, as the financial secretary explained last month. All of Britain’s zero rates of VAT, such as on books and children’s clothing, predate our accession to the European Community in 1975, and it seems plausible that the “tampon tax” will form part of the government’s ongoing renegotiation project. Indeed, the European dimension to the tax gave us the somewhat surprising sight of Ukip campaigning in the 2015 general election on an anti-tampon tax platform. Yet there is a possible domestic solution that hasn’t yet been discussed which could ameliorate the impact of the tampon tax while not breaking any laws.

This can best be illustrated by sketching the costs of the tampon tax, minimal as they are. The Treasury estimates it only takes in about £15m in revenue from VAT on sanitary products. For perspective, figures from the Office for National Statistics indicate there are roughly 17 million women and girls aged between 12 and 51 (the average ages of menarche and menopause) in the UK, amounting to a total cost of 88.3p per woman per annum. Consumer research conducted in September implies, however, that women spend an average of £13 per month on sanitary products, leading to an approximate annual VAT payment of £7.80. The real figure is probably somewhere in between: manufacturers of menstrual cups like Mooncup usually put it at about 240 tampons per year, costing around £2 in VAT.

Instead of undergoing the complexity of trying to zero-rate VAT, why not simply subsidise it? Were the government serious about getting rid of the (rather marginal) tampon tax, it could deposit this average annual cost of VAT on sanitary products into the bank accounts of every woman of menstruating age in Britain, or into the bank account of their primary carers if they’re under 18. This payment – call it a women’s rebate, or perhaps a period premium – would be fairly cheap: £15m if the Treasury’s figures are right (not including implementation costs), but perhaps up to £40m or so.

Besides its symbolic value, this has the happy side-effect of not breaching EU law: there is no law against the government simply giving women a tiny injection of money once a year to compensate for the tax it claims to find so iniquitous. In fact, since menstruation is prone to irregularities, it might be sensible to bump up the amount by a few pence to compensate for menorrhagia and other unforeseeable complications.

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Faced with this, we have to ask whether the government is being honest about its desire to do away with the tampon tax. VAT zero-rating is a relic of the pre-EU days, and it is unlikely that other member states will want to open the can of worms of national sales taxes. The Treasury cannot be ignorant of this diplomatic reality, so it must know its chances of success in Europe are minimal.

Until there is action in the EU, though, there’s no reason the government couldn’t ease the impact of the tax in this way – unless, of course, it doesn’t actually care about women’s health and is simply using the campaign against the tampon tax for cheap anti-Brussels headlines. One could even imagine that a government which gleefully cuts public spending, even on domestic violence services, in a way that hits women hardest might not have their best interests at heart.

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So, here is a way for the Conservative Treasury to prove (for a relatively small price tag) that it isn’t just cynically exploiting a popular protest movement for anti-European points, and make excellent PR out of a troublesome legal situation. Perhaps it could implement the premium as an addition to the tax credits it’s so eager to cut. But it probably won’t happen: after all, if the government could afford to commit to losing the £15m or more in VAT revenue for very little gain, we might start asking if some other cuts to public services which make women’s lives immeasurably more difficult than any tampon tax, are really necessary. That would never do.