|Editorial commentary; Lest we forget the direction the EU is travelling in!|
In all the recent media ‘froth’ one area for discussion has been virtually ignored – that of the direction the EU has moved & is continuing to ‘travel’ in.
None of the politicians, ex-politicians (including Tony ‘responsible for the Iraq war’ Blair) and political pundits are critically discussing & analysing just how that would impact on the UK if we remain bound by its rules.
Last week the EC quietly announced their desire (and they normally get what they want - eventually) for a transition to qualified majority voting (QMV) on EU Tax policy, which currently requires unanimity among Member States. In the Communication, the EC asks that EU leaders, the European Parliament and other stakeholders assess the possibility of a gradual, four-step progression towards decision-making based on QMV as set out below (see factsheet for full details):
The Communication suggests that Member States decide swiftly to converge on a decision to develop Steps 1 & 2 and (on the face of it) their proposal(s) seem fairly logical.
The EC claims, the use of QMV under Step 3 would help to modernise already harmonised EU rules such as VAT and excise duty rules (thus frustrating forever the UK’s desire to zero rate sanitary products for example?).
Step 4 would allow a shift to QMV for major tax projects, such as the Common Consolidated Corporate Tax Base (CCCTB) and a new system for the taxation of the digital economy. While the UK might agree the need for the latter, would we still have any voice in the decision-making process by then?
More importantly both the UK and Ireland could ‘kiss goodbye’ to changing their corporation tax levels in response to market forces. Surely with Spain, Italy, Germany, France, Austria, Belgium, Denmark, etc. all currently having tax rates of 25%+, the QMV process would inevitably force the rate to rise in the UK.
The Communication suggests that Member States consider developing Steps 3 & 4 by the end of 2025.
Action in the areas outlined would be possible under the so-called ‘passerelle clause' (Article 48(7) TEU) in the EU Treaties which allows for a shift to qualified majority voting and the ordinary legislative procedure under certain circumstances. No EU Treaty change is necessary.
Postscript: Readers following the ‘struggle’ as to who controls future decisions about Brexit negotiation policy should find a new Policy Exchange report of interest (PX: The Contest to “Take Control” of Brexit and also an offering from Briefings for Brexit (B4B: Now for a Free Trade Deal )