The Boiling Frog: Direct EU Taxes?

Wednesday, 20 October 2010

Direct EU Taxes?

Direct taxation has long been the desire of the EU, despite its political ramifications, which it readily acknowledges:

"EU bureaucrats, already braced for a massive backlash, have advised officials to avoid using the word “tax” because it would be “politically explosive”.

Too right it would be politically explosive. However yesterday the EU Commission still sought to continue to made its case for EU direct taxation, in relation to the budget negotiations for 2014-2020:

To this end, the Commission enumerates, in a non-exhaustive list, the following options for own resources that could be discussed:
taxation of the financial sector,

EU revenues from auctioning under the Emissions Trading System,

a EU charge related to air transport,

a EU value added tax,

a EU energy tax

a EU corporate income tax.
In a technical annex to the Communication, the advantages and disadvantages of each are listed. Most importantly, the future blend of own resources would be a replacement not an addition to the financing of the budget.

I suspect there's an element of sabre rattling here (the first one already seems to have been ruled out). The EU wants a 6% budget increase despite the budget cuts in the member states and is facing resistance. Putting forward proposals for direct taxation, which will be unpopular, looks like very much like a negotiating position for the budgetary increase discussions next year. The UK and Germany have indicated strongly that any form of direct taxation will be vetoed (although with the Cameron's Tories you can never be sure). So let the horse trading begin.

Suffice to say that should such a situation occur, and we all know the EU will return again and again with such demands ad infinitum, then a significant and important line would have been crossed. No longer would my campaign only take on the form of blogging, standing in elections, etc, but a willingness to avoid such taxes (however difficult that proves to be) whatever the consequences.

Update: There's a petition against direct EU taxation here:

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EU quotes

"[There's no way Britain could accept that] the most vital economic forces of this country should be handed over to an authority that is utterly undemocratic and is responsible to nobody"
(British Prime Minister Clement Attlee in response to the Schuman Plan 1950)

"Parliament must...resign itself to becoming a rubber stamp."
(Lord Kilmuir, advice to Edward Heath, December 1960)

"We should frankly recognise this surrender of sovereignty and its purpose."
(Edward Heath, Hansard, 17 November 1966)

“America would welcome it if Britain should apply for full membership in the [EEC], explicitly recognising that the Rome treaty was not merely a static document but a process leading towards political unification.”
(George Ball Under-Secretary of State for JFK 1961)

"The single market was the theme of the Eighties; the single currency was the theme of the Nineties; we must now face the difficult task of moving towards a single economy, a single political unity".
(Romano Prodi, 13 April 1999)

"Let's imagine Europe is a football club and you join, but once you're in it you can't say let's play rugby". (French foreign minister Laurent Fabius)

"We perform the duties of freemen; we must have the privileges of freemen ..."
(Chartists 1836)

"The [Lisbon Treaty] is indeed a tidying -up exercise, it sweeps the rest of our sovereignty under the Brussels carpet".
(Lord Pearson)

"The Government’s guiding principle was...to swallow the lot and swallow it now."
(Sir Con O’Neill, the British diplomat who led the UK’s negotiations for EEC membership under Heath)

"I look forward to the day when the Westminster Parliament is just a council chamber in Europe."
(Kenneth Clarke, Conservative Chancellor in International Currency Review Vol 23 No 4 1996)

"The EU is the old Soviet Union dressed in Western clothes"
(President Gorbachev)

"Europe's power is easy to miss. Like an 'invisible hand', it operates through the shell of traditional political structures. The British House of Commons, British law courts, and British civil servants are still here, but they have all become agents of the European Union implementing European law. This is no accident."
(Mark Leonard co-founder and director of the European Council on Foreign Relations, the first pan-European think tank)

"We need to build a United States of Europe with the [EU] Commission as government".
(Viviane Reding, EU Commissioner 2014)

"A supranational union is a multinational political union where power is delegated to an authority by member states".
(Wikipedia)

“A coup d’état by a political class who did not believe in popular sovereignty”.
(Tony Benn on the European Communities Act 1972)

"Once [WWI was over, countries] went back to rules & customs of parliamentary democracies. I felt out of my depth".
(Jean Monnet, Father of EU')

"EU Parliament is incredibly responsive to lobbying institutions, but is unresponsive to public opinion".
(Gisela Stuart, Labour MP 2009)

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises".
(Jean Monnet, Father of EU')

"I have lived in your future ….and it doesn’t work".
(Russian dissident Vladimir Bukovsky on the EU)

"Determined to lay the foundations of an ever closer union among the peoples of Europe".
(Treaty of Rome 1957)

"This Treaty marks a new stage in the process of creating an ever closer union..."
(Maastricht Treaty 1992)

"This Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe".
(Lisbon Treaty 2007)

"Never out on principle; never in on principle [regarding EEC membership]. It depends on the terms and whether it is best for Britain".
(Labour leader Harold Wilson, May 1975)

"Now we've signed it - we had better read it"
(Douglas Hurd, former Foreign Secretary on the Maastricht Treaty)

"The supremacy of Community Law when in conflict with national law is the logical consequence of the federal concept of the Community"
(H P Ipsen, 1964 - 9 years before the UK joined)

"[Norway] held a referendum [on the EU] that went the wrong way"
(Douglas Hurd, former Foreign Secretary on the Maastricht Treaty)

"Public opinion will be led to adopt, without knowing it, the proposals we dare not present to them directly. All the earlier proposals will be in the new text, but will be hidden and diguised"
(Valery Giscard D'Estang. on the Lisbon treaty)

"The Tories have been indulging in their usual double talk. When they go to Brussels they show the greatest enthusiasm for political union. When they speak in the House of Commons they are most anxious to aver that there is no commitment whatever to any political union."
(Labour MP Hugh Gaitskell, October 1962)

"It means the end of a thousand years of history."
(Hugh Gaitskell - 1906-63, on a European federation; speech at Labour Party Conference, 1962)

"The Constitution is the capstone of a European Federal State."
(Guy Verhofstadt, Belgian Prime Minister)

'If it's a Yes we will say "on we go", and if it's a No we will say "we continue".'
(Jean-Claude Juncker, President of the European Council)

“The substance of the Constitution is preserved. That is a fact.”
(German Chancellor Angela Merkel on the Lisbon Treaty)

"I have read some of [the Lisbon Treaty] but not all of it."
(Caroline Flint, former Minister for Europe)

"The primary reason why Britain entered into [EEC] negotiations was political, political in its widest sense."
(Edward Heath, lecture at Harvard, 1967)

“They must go on voting until they get it right.”
(Jose Manuel Barroso, President of the European Commission)

"If you go through all the structures and features of this emerging European monster you will notice that it more and more resembles the Soviet Union."
(Russian dissident Vladimir Bukovsky)

"The European Union is a state under construction."
(Elmar Brok, Chairman of the European Parliament’s Committee on Foreign Affairs)

“I have never understood why public opinion about European ideas should be taken into account at all,”
(French PM Raymond Barre)

“I believe neither the French nor the Dutch really rejected the constitutional treaty.”
(Jean-Claude Juncker, Prime Minister of Luxembourg)

“Let’s be clear about this. The rejection of the constitution was a mistake that will have to be corrected.”
(Valéry Giscard d’Estaing)

“The 'no' votes were a demand for more Europe, not less.”
(Romano Prodi, former President of the European Commission)

"I don’t want an ‘in or out’ referendum because I don’t think out is in Britain’s interests.”
(David Cameron, who won't hold a referendum because he thinks he'll lose)

"...there are constitutional innovations."
(Mr Patrick Jenkin, former Tory MP during 2nd reading of European Communities Bill 1972)

"In Brussels one says "member state". You may imagine it means the same thing as country or state, but "member state" does not. Note that adjective. Member modifies state. Like "wooden" modifies "leg". The noun stays the same, but the essence of the thing is gone."
(Mary Ellen Synon, Bruges Group Annual Conference 2013)

"No government dependent on a democratic vote could possibly agree in advance to the sacrifices which any adequate plan for European Union must involve. The people must be led slowly and unconsciously into the abandonment of their traditional economic defences, not asked…"
(Peter Thorneycroft, former Tory MP)

"[Bailouts are] expressly forbidden in the treaties by the famous no-bailout clause. De facto, we have changed the treaty."
(French Europe minister Pierre Lelouche)

"The transfer by the States from their domestic legal system to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights... against which a subsequent act incompatible with the concept of the Community cannot prevail"
(ECJ Case 6/64)

"[The EU Constitution represents] a visible move in only one direction...from intergovernmentalism to supranationalism...and this should be explained to the people of Europe"
(Czech Republic President Vaclav Klaus)

"European integration is fortunately a train moving too fast for anyone to stop it."
(Vaclav Havel, Czech Politician)

"The European Parliament is a caucusing body that is incredibly responsive to lobbying institutions, but it is completely unresponsive to public opinion."
(Gisela Stuart, Labour MP June 2009)

“Millions of people in this country will feel as I do, that legislation passed in this way, with no consent, cannot command the assent of the country and would lack moral and constitutional validity."
(Douglas Jay MP during 2nd reading of European Communities Bill 1972)

"It is an illusion to think that [EU] states can hold on to their autonomy."
(Hans Tietmeyer, head of the Bundesbank 1991)

"...within ten years 80% of our economic legislation, perhaps even fiscal and social as well’ would come from the EU."
(Jacques Delors, President of EU Commission 1988)

"The huge cost of the Common Agricultural Policy to taxpayers and consumers far outweighs any benefit to them..."
(Memo by MAFF to House of Lords European Communities Committee 1995)

"...we must now face the difficult task of moving towards a single economy, a single political unity."
(Romano Prodi, President of EU Commission 1999)

"The day of the nation state is over."
(Roman Herzog, German president, 1996)

"The European system of supranationality comes at the cost of democracy."
(Lord Leach of Fairford)

"The [EU] Council of Ministers will have far more power over the budgets of member states than the federal government in the United States has over the budget of Texas."
(Jean-Claude Trichet, current head of the European Central Bank)

"One must never forget that monetary union, which the two of us were the first to propose more than a decade ago, is ultimately a political project. It aims to give a new impulse to the historic movement toward union of the European states"
(Giscard d’Estaing, who drafted the EU Constitution 1997)

"The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU [economic and monetary union] is, and always was meant to be, a stepping stone on the way to a united Europe"
(Wim Duisenberg, first president of the EU Central Bank)

"Once the interlude of [WWI] was over, [countries] all went back to the rules and customs of traditional parliamentary democracies. I felt out of my depth."
(Jean Monnet 'Father of Europe')

"We need to build a United States of Europe with the [EU] Commission as government."
(Viviane Reding, EU Commissioner 2014)

"We had imagined a political 'grand design', a new international order..."
(Jean Monnet 'Father of Europe')

"I like the English style of life. I feel more at home here in London"
(Tintin creator, Belgian born Herge)

"We are not forming coalitions between States, but union among people"
(Jean Monnet, 'Father of Europe')

"The sovereign nations of the past can no longer solve the problems of the present: they cannot ensure their own progress or control their own future. And the Community itself is only a stage on the way to the organised world of tomorrow."
(Jean Monnet, 'Father of Europe')

"That such an unnecessary and irrational project as building a European super-state was ever embarked on will seem in future years to be perhaps the greatest folly of the modern era. And that Britain . . . should ever have become part of it will appear a political error of the first magnitude."
(Lady Thatcher, Statecraft)

"There is no question of Britain losing essential national sovereignty”
(Ted Heath)

Euro quotes

"Euro has done more to enforce budgetary discipline in rest of Europe than any number of exhortations from IMF or OECD".
(Nick Clegg, 2002)

"We're happy to give the Greeks anything, just not money".
(German MEP Markus Ferber 2010)

"The Euro has been a rock of stability... Joining the single currency would be a major step".
(Labour MEP, Richard Corbett, 2009)

"The single currency... marks stability and growth and is crucial to high levels of growth and employment".
(Tony Blair 1998)

"Britons will come round to the idea [joining the euro] once they’ve handled euro money".
(Adam Boulton Sunday Times, 2001)

"Staying out of the Euro will mean progressive economic isolation for Britain".
(Peter Mandelson, 2003)

"The European Union must take a decisive step towards a federal economic government, with common fiscal policies and a larger budget, if it is to save the euro".
(Andrew Duff Lib Dem MEP 2011)

"A European currency will lead to member nations transferring their sovereignty over financial and wage policy as well as monetary affairs".
(Hans Tietmeyer, head of the Bundesbank, 1991)

The single currency is the greatest abandonment of sovereignty since the foundation of the European Community: the decision is of an essentially political nature".
(Felipe Gonzalez, a Spanish former PM, 1998)

"The euro area now represents a pole of stability for those countries participating in it by protecting them from speculation and financial turmoil. It is strengthening the internal market and contributing to the maintenance of healthy fundamental figures, fostering sustainable growth".
(European Council conclusions, 2001)

"We must enter the euro with a clean sheet on all the criteria".
(Then Greek Finance Minister, Yannis Papantoniou, 1999)

"The reality of the euro has exposed the absurdity of many anti-European scares while increasing the public thirst for information. Public opinion is already changing…as people can see the success of the new currency on the mainland".
(Kenneth Clarke MP, 2002)

"The euro is a great success, and in today’s global economy, the pound is no longer an important currency. If we are not careful, we could become like Iceland in the next financial crisis".
(BT Group Chairman, Sir Michael Rake, 2009)

"I think the eurozone has turned the corner".
(Then French Economy Minister, Christine Lagarde, 29 January 2011)

"I believe that, within the next twelve months, we will have averted contagion and stabilised the eurozone".
(German Finance Minister, Wolfgang Schäuble, 30 December 2011)

"We cannot be members of the single market without being part of the single currency, the euro...In life, fighting for a minority view is sometimes dangerous and painful. But when you know you are right, and when so much of our national prosperity depends on it, we should expect our political leaders to act".
(Virgin Group Chairman, Richard Branson, 2000)

"We are writing to make clear our concerns about the implications for business if the Government rules out membership of the euro for the lifetime of this Parliament. Such a decision would be damaging for British-based businesses, British employees and the British economy as a whole".
(WPP Group CEO, Sir Martin Sorrell, et al., 2003)

"A single currency, introduced at the appropriate time, will reduce costs for businesses that trade or invest across Europe...More investment in growing
businesses means more employment".
(Then BP Chairman, Lord David Simon, 1997)

"Joining the euro would increase our incomes and thus our standard of living...Now the countries of Europe have taken one more step towards making a truly unified market, using only one currency. If again we delay joining, we again risk falling further behind".
(Former Energy Secretary, Chris Huhne, former CBI Director General, Lord Adair Turner, et al., 2002)

"Staying out of the euro will mean progressive economic isolation for Britain. It will mean fewer foreign businesses investing here, fewer good jobs being created and less trade being done with our European partners".
(Former Business Secretary, Lord Peter Mandelson, 2003)

"Britain should join the euro within the next few years in order to enhance British power and influence".
(Centre for European Reform Director, Charles Grant, 2001)

"Joining EMU would offer multiple benefits...The euro would be good for jobs".
(Then TUC Secretary General, John Monks, 2003)

"As time goes on, people will increasingly see that there is a price to be paid for remaining outside the euro".
(Former Labour Party leader, Neil Kinnock, 2002)

"The euro may well come to be regarded in the coming years as part of the answer to saving the City from permanent decline. It was easy to dismiss the fledgling euro as a ‘toilet currency’ before we realised our own economic growth was built on sand".
(Lib Dem leader, Nick Clegg, 2009)

"Obviously joining a currency that everybody in Europe - including soon all the new European Union members - are using, a currency that American and Japanese and overseas businesses understand, has to make sense".
(Then UK Europe Minister, Denis MacShane, 2003)

"The euro, despite gloomy predictions from anti-Europeans, has proved to be a success".
(Former Lib Dem leader, Charles Kennedy, 2002)

"In reality the economic integration between Britain and the Continent is so close, and we have confirmed this because we all belong to the common market, that it can't be good in the long run to stay out of such a cardinal element as the currency union".
(Then German Finance Minister, Hans Eichel, 2002)

"There are no real benefits and some real costs to the UK of monetary independence... it makes sense from a financial stability perspective for the UK to contract out monetary policy to the ECB".
(Citigroup Chief Economist, Willem Buiter, 2007)

"Taking part in EMU would improve policy and performance enough to eliminate many of the strains that sceptics predict would emerge without the safety valve of devaluation".
(BBC Trust Vice Chairman, Diane Coyle OBE, 1997)

"The euro is like a breastplate that will become more and more resistant. The stability of the currencies within its area is without question".
(Then EU Monetary Affairs Commissioner, Yves Thibault de Silguy, 1998)

"The strict rules attached to the euro could emerge as one of the best ways to persuade the markets that we will put Humpty Dumpty back together again, put the public finances in order".
(Lib Dem leader, Nick Clegg, 2009)

"The question of entering the euro is worth a lot more to Britain than the wild anti-federalist fantasies peddled by those who think Britain should have nothing to do with Europe. Nobody of any consequence in Europe wants to create a federal super-state".
(Former Business Secretary, Lord Peter Mandelson, 2003)

The British Government Knew The Consequences In 1971

Foreign and Commonwealth Office 30/1048 - 1971

...the transfer of major executive responsibilities to the bureaucratic Commission in Brussels will exacerbate popular feeling of alienation from government. To counter this feeling, strengthened local and regional democratic processes within the member states and effective Community regional economic and social policies will be essential.

Parliamentary sovereignty will be affected as we have seen. But the need for Parliament to play an increasing (if perhaps more specialised) role may develop. Firstly, although a European Parliament might in the longest term become an effective, directly elected democratic check upon the bureaucracy, this will not be for a long time, and certainly not in the decade to come. In the interval, to minimise the loss of democratic control it will be important that the British Parliamentarians should play an effective role both through the British membership in the European Parliament and through the processes of the British Parliament itself.

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Wednesday, 20 October 2010

Direct EU Taxes?

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