Tax Harmonisation — 9 Dec 1998

I beg to move,

That this House deplores the Government's attempts to be all things to all men on the issue of EU tax harmonisation; urges the Government to explain what confidence can be placed in Ministers' undertakings to use the veto, given the Chancellor's decision to sign up to the Party of European Socialists' "New European Way" document and given the EU Tax Commissioner's insistence that the UK is "fully on board" for progress towards tax harmonisation; asks the Government to place in the Library the list of 85 instances of alleged "harmful tax competition" identified by the Code of Conduct Working Group chaired by the Financial Secretary, ten of which are believed to relate to the UK; and urges the Government to make a clear statement of its policy towards EU tax harmonisation.

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

recalls that the last Government's record on tax was one of broken promises, that it raised taxes 22 times having promised to cut taxes, including putting VAT on domestic fuel and power having specifically promised not to do so, and further that it tried to raise VAT on fuel to 17.5 per cent.; welcomes the fact that this Government has kept all of its promises on taxation, including its promises not to raise the basic or top rates of income tax and cutting VAT on fuel to 5 per cent.; and further welcomes the Government's approach to taxation at an international level, favouring fair tax competition, supporting concerted action at European level, including through the EU Code of Conduct Group, to deal with discriminatory and unfair tax practices that distort real competition, stating that it will not support measures that are not in Britain's national economic interest or that damage British business, harm investment and jobs, or damage Europe's competitiveness, and reiterating that it will retain the veto on tax issues and that decisions on tax will remain subject to unanimity.

Question put, That the original words stand part of the Question:--

The House divided: Ayes 140, Noes 359.

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