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We have become more powerful XI

Posted by Richard Monday, April 04, 2005

"And for all of those that say, if you look at the last thirty years, we have lost power to Brussels, actually it isn't true. In the last, certainly in the last eight years, as we, the Labour government, have been more involved in Europe, so we have become more powerful and more prosperous, better able, literally to implement a patriotic case for the European Union."

Jack Straw
Foreign Secretary

BBC Today Programme, 9 February 2005


This week lawyers are confidently forecasting that the European Court of Justice will force the Treasury to repay billions to a group of companies that have claimed the UK corporation tax system breaches the EU law.

As a result, according to Gabriel Rozenberg, writing in The Times business section, this means that the ECJ is set to blow a billion-pound hole in the government's finances.

This is the case brought by Marks & Spencer in an attempt to reclaim £30 million paid in tax, which we reported on in an earlier post, and tax experts believe that an advocate-general of the court will confirm that the law is incompatible with EU treaties.

Behind M&S stand another seventy companies, including BT, InterContinental Hotels, Pilkington and First Choice Holidays, all of which are now pursuing a class-action claim in the High Court on similar grounds to M&S.

The amounts at stake have been kept confidential, but a recent report from Morgan Stanley, the investment bank, suggested BT could make a claim of up to £400 million. BT would confirm only that its claim was larger than M&S’s.

The report added that the biggest beneficiary could be Vodafone, which has not so far registered a claim, but which the report said might be able to make a claim for £2 billion. Sean Finn, tax partner in Lovells, the law firm, said that the total sum the Revenue might be forced to pay could reach £5 billion.

So there you have the equivalent of nearly 3p on income tax, wiped out by the EU, a body that successive ranks of politicians, those faceless, grey apologists for the "project", those ghastly, self-serving ranks of MEPs and all the other dregs which pollute this earth, have constantly assured us has absolutely no power over our tax system.

In fact, as we have reported before, we are looking at the slow death of fiscal sovereignty, and there is precious little anyone can do about it as long as we remain members of the EU.

Thus, in the week that the general election is to be kicked off, you can bet your sweet life that none of the main parties is going to be too keen to flag this one. And what is the betting that the BBC does not even report it?

Come to think of it, why is it being reported only in the business section of The Times? Hey folks, £5 billion is a hell of a lot of money – a massive amount of money, a truly gigantic slug of money, an amount of money that it is almost impossible to visualise and no single mortal could conceive of spending.

This, dear readers, should be on the front page of every newspaper and lead item on all the news broadcasts, with the hacks telling us that, this week, the EU is going to take action which, in the fullness of time, will cost us £5 billion.

Of course, this won't happen. That would make it too difficult for Mr Jack-the-lad Straw and his odious claque who keep telling us how much more powerful we have become since the Labour government became more involved in Europe.