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Brown blocks EU tax grab?

Posted by Richard Monday, May 10, 2004

Updated

According to the Sun today, our Gordon (Brown that is) has "risked a bust-up with Euro leaders by demanding huge changes to the new EU constitution." He fears "dozens of crafty clauses could give Brussels powers over Britain’s tax system and economy."

In time honoured fashion, at a finance minister’s meeting in Brussels tomorrow, we are told that he is to put his foot down and "warn EU finance ministers that NO deal will be reached while the threat to the UK’s economic policies remain". (Sun’s emphasis).

The Guardian is running a similar line, reporting that Brown, "who has been pushing for the changes since December", is concerned that the draft treaty refers solely to "European laws" when it mentions issues such as tax and deficit monitoring procedures. He is insisting this should be changed to say "European laws unanimously agreed by the council of ministers".

He is also said to be demanding that are at least 25 amendments must be made to the draft treaty in the key areas of tax and budgets.

The question is, however, which draft is he talking about? In the new Irish presidency proposals, qualified majority voting on taxation is moderated by a new provision that unanimity is required if a proposal affects the fiscal system of the Member States.

But, since the decision as to whether fiscal systems are affected remains with the Council, and QMV applies if its is decided that a new law is needed to deal with fraud or tax evasion, it seems that the Council can decide whether or not QMV applies, possibly by QMV.

It is this sort of toe-curling opacity in the draft that makes understanding of what is going on almost impossible – which may explain why the serried ranks of the media today have completely ignored the revelation of a new Irish draft and gone for the soap opera story of "Jacques meets Tony".

The more important story is far too complicated, and would require journalists to do some work, instead of lifting vast tranches of copy from agency releases.

But, what did emerge from the Sunday Telegraph when yesterday's story was being written was that Downing Street – when first asked about it – seemed unaware of the new Irish draft. They sought to deny its existence. That suggests that Blair might not have been briefed by the Foreign Office, and it may be that the briefing did not reach No. 11 either.

Gordon may be putting his foot down tomorrow therefore, but unless he has looked at the small print of the Irish draft, he may be barking up the wrong tree. Does he even know it exists?