'Tampon tax' issue to be raised with the European Commission
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The issue of the so-called "tampon tax" on sanitary products will be raised with the European Commission, a UK Treasury minister has said.
David Gauke said the government sympathised with efforts to force a negotiation with the EU for a reduction in the 5% VAT rate on sanitary items.
But he said the UK was unable to apply a zero rating under EU law.
MPs rejected the Finance Bill amendment, which would have forced a negotiation, by 305 to 287 votes.
HM Revenue and Customs (HMRC) says the VAT rate charged on the items is the lowest allowed under EU law.
The government said any change would require a European Commission proposal and the unanimous agreement of all 28 member states.
Mr Gauke, the financial secretary to the Treasury, said: "This debate illustrates there is very considerable cross-party support for the UK to abolish VAT on sanitary products.
"To that end… I will raise this issue with the European Commission and other member states setting out our views that it should be possible for member states to apply a zero-rate to sanitary products."
Labour cut the rate when it was in government from the then-standard rate of 17.5% - imposed in the 1970s - to the lower rate of 5%, but was prevented from going any lower by the European rules.
A petition calling for a change in the law has more than 250,000 signatures.
'Absurd'
Labour MP Paula Sherriff's amendment, backed by shadow chancellor John McDonnell, would have required Chancellor George Osborne to publish, within three months, a strategy for negotiating an exemption with EU institutions.
One of the Conservatives supporting the motion, Bernard Jenkin, said the situation was "an example of where the EU has taken over jurisdiction over our tax where it should not have".
SNP MP Alison Thewliss added: "It is absurd that while men's razors, children's nappies and even products like Jaffa Cakes, exotic meats and edible cake decorations are free from VAT, women are still having to pay additional costs on what is already an expensive yet vital product."
A Treasury spokesman said: "The UK has set the VAT on sanitary products at the minimum rate permissible under EU rules."
Asked about the calls for a zero VAT rate, the prime minister's spokeswoman said: "What is being proposed is not something that being looked at we think is achievable."
The European parliament will take a key vote on Tuesday on rules affecting how internet traffic is managed.
MEPs are considering a new set of rules for telecoms companies inside the EU.
The plan could have major implications for net neutrality, where traffic is not slowed down or priced differently because of its content or origin.
Some people fear the plan may lead to such restrictions but others argue that first it would have to be turned into specific regulations.
Some tech companies, campaign groups and the inventor of the web Sir Tim Berners-Lee have all called for the adoption of amendments to the rules, which they believe would better safeguard the principles of net neutrality.
However, this would mean rejecting the plan in a form to which EU governments have already agreed.
Another part of the legislation, which would abolish mobile roaming charges within the EU, is popular with MEPs, so enthusiasm for rejecting it in its current form and further delaying this move is low, according to some analysts.
What is net neutrality?
The idea that data should be ferried from place to place as quickly as possible, regardless of what it is, is how most people assume the internet works.
That's the essence of net neutrality.
However, it's possible to decide to prioritise certain types of data over others - perhaps, for example, by charging the producers of such data a fee to make sure their content gets delivered promptly.
For big video streaming sites, the prospect is worrying. They could find themselves coughing up lots of money in fees simply to give their users the same experience as before.
Some argue, however, that such fees are fair since it costs internet service providers a lot of money to keep providing such content, no matter how popular the streaming sites become.
Image copyrightGetty ImagesImage captionAn overall majority of MEPs will be required for the amendments to pass
What are MEPs voting on?
The plan that members are actually voting on is a proposed set of amendments to the rules governing telecoms companies that work inside the EU.
If they decide not to adopt the amendments, that will count as acceptance of the proposal in its current form.
The amendments make an attempt to highlight the significance of net neutrality principles, such as applying the same scrutiny across networks regardless of their market share.
But telecoms law expert Chris Marsden at the University of Sussex told the BBC there is reluctance within the parliament to do this because it could delay and possibly jeopardise other parts of the rules which aim to abolish EU roaming charges.
"If the parliament votes for [the amendments] and they amend the text that the governments had all agreed to - then the whole thing would actually fail [if the Council of Ministers also rejects the plan]," he explained. In that case, a further reading of the rules would have to be arranged.
How could the rules affect internet use?
Part of the problem with the rules in their current form, argued Joe McNamee of theSave the Internet campaign, is that they are ambiguous.
"As the text currently stands there is no indication as to how much abuse of dominance would be permissible under this arrangement," he told the BBC.
The sort of scenarios that could impact internet use include the creation of "fast lanes" and "slow lanes" - traffic prioritised depending on fees paid by content providers - or the creation of "zero ratings" in which some services may be accessed without using up any of the internet user's data quota.
In Belgium, for example, some mobile phone companies currently allow unlimited access to Twitter and Facebook while all other data usage is part of a monthly plan. In a few countries such as the Netherlands, such practices are not allowed.
However, regulators would have to decide on the specifics of what would and would not be allowed before any EU-wide changes could be enforced.
Image copyrightGetty ImagesImage captionProponents of net neutrality say it's the best way to enable free and open competition on the web
Who is arguing that the amendments be adopted?
Besides a host of net neutrality campaigners, inventor of the world wide web Sir Tim Berners-Lee has added his voice to those supporting the amendments.
"If adopted as currently written, these rules will threaten innovation, free speech and privacy, and compromise Europe's ability to lead in the digital economy," he wrote in a blog.
Meanwhile a string of tech companies have signed a letter to the president of the European Parliament, Martin Schulz, asking MEPs to adopt the amendments.
The firms include Netflix, Tumblr, Vimeo, Kickstarter and Reddit.
"I was contacted by a number of start-ups and investors because they were deeply concerned about the impact of the European Parliament's network neutrality proposals on start-up innovation in Europe," Stanford professor Barbara van Schewick, who helped pen the letter, told the BBC.
Is it likely the amendments will pass?
In order for the amendments to be adopted, they would have to achieve an overall majority of MEPs - 376 out of 751 members.
Dr Marsden believes this is unlikely but Dr van Schewick said she believed there was some growing momentum within the parliament on incorporating the changes.
Image copyrightGetty ImagesImage captionTom Wheeler, chairman of the US Federal Communications Commission, has overseen a long-running debate on net neutrality
Do other countries have net neutrality?
Interestingly, three countries within the EU - Netherlands, Slovenia and Finland - already have a range of net neutrality rules enshrined in law.
These laws might have to be altered depending on how any new, EU-wide rules are interpreted by regulators later.
Elsewhere, net neutrality has received some regulatory protection in the United States after a vote in February this year placed new restrictions on what deals could be sought by internet firms with content providers.
But in other countries, such as India, "zero rating" is allowed.
"It's a fragmented picture across the board," said Dr Marsden.
"It's an extremely difficult area and there are probably no absolutely right answers."
The government says it has helped secure an "excellent deal for the UK" following its negotiations over the 2012 EU budget.
The spending plans were set at an inflation-only rise of 2% to 129bn euros (£110bn) after 15 hours of talks.
Euro-MPs and the European Commission wanted more than double the increase.
But they were defeated by governments including the UK, which insisted they would not allow EU rises while imposing national spending cuts.
Euro-MPs had demanded a 5.2% budget rise arguing EU policy spending - most of which is redistributed in the member states in grants and subsidies - can take up the slack of national budget cuts in many areas.
Last month, Europe minister David Lidington called the proposed rise in the long-term budget "astonishing" and Prime Minister David Cameron has also said hard-pressed Britons would not understand anything above an inflation-only rise in euro spending in the foreseeable future.
An 11% rise would, according to Treasury estimates, add an extra £1.4bn (164bn euros) a year between 2012 and 2020 to the UK's contributions to the EU budget.
The only concession - which the UK voted against - to the Commission and MEPs was an "amendment" to the 2011 budget to make available up to 200m euros (£170m) extra.
EU Budget Commissioner Januz Lewandowski said the agreed deal was "clearly an austerity budget" and warned Brussels may not have enough money to meet all its financial commitment to recipients of its funds next year.
'Inflation-busting proposals'
No deal on the long-term budget is likely before the end of next year, but British ministers anxious to put down an early marker of belt-tightening are now buoyed by the 2012 budget result.
Financial Secretary to the Treasury Mark Hoban, representing the UK at the negotiations, said the decision was a victory.
"We have stopped the European Commission and European Parliament's inflation-busting proposals and have delivered on the government's promise to freeze the EU budget in real terms," he said.
"Throughout this process, we have argued that, with member states facing tough decisions on spending at home, we could not afford these unrealistic demands.
"This settlement is far below the 5.2% the European Parliament wanted and the 4.9% proposed by the Commission. It is also 12bn euros (£10.3bn) less than the maximum ceiling agreed in 2005."
He added: "We will also be fighting hard with like-minded member states against unaffordable rises in the next seven-year budget."
But UKIP leader Nigel Farage said the government was "dressing a defeat up as a victory".
"Time and time again this government has promised that it will fight EU budget increases. Time and time again we are told that a reverse is victory.
"This 2.2% increase equates for Britain an increase in our contributions to Brussels of £350m (409m euros). Will Mr Cameron tell us which services he is planning to cut to make up the shortfall - will the NHS be hit, will it be education, will it be policing?"
Greece and Italy are in trouble - Italy faces a high cost of borrowing and Greece has crippling debt payments it cannot afford.
Anna Diamantopoulou, the Greek Education Minister, told Sarah Montague that "there is a war of markets against Europe as a whole."
Lucio Malan, the Secretary of the Italian Senate, says that whilst China "has plenty of cash and it could be a good deal for them to buy some European debt", Europe has to rely on itself.
You can watch the full interview on BBC World News on Thursday 10 November at 1530 and 2130 GMT and on Friday 11 November 2011 at 0430 and 0930 GMT. And on BBC News Channel on Friday, 11th November 2011 at 0030 and 0430 GMT
The key elements of an emergency "three-pronged" deal to fix the eurozone's debt crisis, which was clinched after marathon talks in Brussels.
Greek debt
Private banks holding Greek debt will accept a write-off of 50% of their returns.
The move is expected to cut the nation's debt load to 120% of its GDP in 2020. Under current conditions, it would have grown to 180%.
Reluctant banks had initially offered a 40% "haircut", but the deal was finally agreed after German Chancellor Angela Merkel and French President Nicolas Sarkozy joined direct negotiations on the issue on Thursday morning.
Bailout fund
The firepower of the main euro bailout fund - known as the European Financial Stability Facility (EFSF) - is to be boosted from the 440bn euros set up earlier this year to 1tn euros.
There is about 250bn euros left available in the EFSF, which the summit statement said could be leveraged 4-5 times.
This can be done in two ways:
By offering insurance to purchasers of eurozone members' debt - in principle making their bonds more attractive to investors and thereby lowering governments' borrowing costs.
And by setting up a special investment vehicle which big private and public investors, including countries such as China, could contribute to.
Both means could be used simultaneously depending on circumstances, the summit statement said.
The framework for the new, increased fund should be in place in November.
Bank recapitalisation
European banks will be required to raise about 106bn euros in new capital by June 2012.
It is hoped that this would help shield them against losses resulting from any government defaults and protect larger economies - like Italy and Spain - from the market turmoil.
"We have reached an agreement which I believe lets us give a credible and ambitious and overall response to the Greek crisis," was how Mr Sarkozy summed up the deal.
After Greece controversially announced it will put its latest European bail-out package to a referendum, the BBC examines how past referendums have hampered the European project.
Twenty of the world's most powerful leaders have been arriving in Cannes for the G20 summit, where the eurozone crisis and Greece will dominate the agenda.
ALAMY
EU's troublesome referendums
What if Greece leaves the euro?
