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Select Committee on European Communities Seventeenth Report


Letter from Dawn Primarolo MP, Paymaster General, HM Treasury, to Lord Tordoff, Chairman of the Committee

  On 26 June 1998 I submitted to the Committee an Explanatory Memorandum on the Commission's report and proposal on the structure and rates of excise duty on cigarettes and other manufactured tobacco products. I also submitted a supplementary EM on 26 March 1999. This letter informs the Committee of subsequent developments on this dossier

  As you know the Government's position is reluctantly to accept that it would not be possible to achieve a meaningful restructuring of the Community tobacco taxation provisions under the present proposal. However, we could not accept that the Commission's periodic reviews, which are the principal means of achieving such a substantive restructuring, should be decreased in their frequency from every two years at present, to every five years (as proposed by the Commission) or even every four years (as proposed by the German Presidency). Therefore the UK has continued to oppose this with very little support from other member States.

  As a direct result of the Government's stance, the Presidency have now suggested a further compromise with the Commission reviews being, "not less frequently than every three years and for the first time not later than 31 December 2000" and have included this on the agenda for ECOFIN on 25 May. This is a significant move from the original Commission proposal and indications are that no other Member State would back us if we were to hold out for any further movement. I have therefore concluded that this latest compromise is unlikely to be improved upon and therefore the Government should now be prepared to indicate our acceptance of the Presidency's latest compromise. A document for formal consideration by the Council should follow. This, of course, would be subject to your scrutiny with a further EM being submitted.

20 May 1999

Letter from Lord Tordoff, Chairman of the Committee, to Dawn Primarolo MP, Paymaster General, HM Treasury

  Thank you for your letter of 20 May, bringing us up to date with progress on this matter. When Sub-Committee A considered the letter at its meeting on 8 June, it shared your regret that further progress had been impossible, but asked me to congratulate you on having persuaded the Presidency to put forward its compromise proposal, which at least means that the policy will come up for consideration again before too long.

  We look forward to receiving the formal proposal and your Explanatory Memorandum in due course.

9 June 1999

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