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Lord Falconer of Thoroton: My Lords, perhaps I may write to say the precise period of time that the monitoring will go on for. We shall also undertake to put in the Library the results of the monitoring.
Lord McIntosh of Haringey: My Lords, the Government's view is that fair tax competition is the way forward for Europe, not proposals for tax harmonisation. The Government will not support any action at European level that would threaten jobs and investment or damage the competitive position of British business.
Baroness Wilcox: My Lords, I thank the Minister for that Answer, but I am not sure that I understand. Does he expect tax harmonisation to appear in the draft constitution being drawn up by the Convention on the Future of Europe?
Lord McIntosh of Haringey: My Lords, there are two answers to that. First, I understand that the work on the draft constitution has got only so far as the preparation of reports by working groups. Nothing conclusive has come out of that. The next stage would have to be that they would have to be accepted by the constitutional convention. Of course, if any change were proposed which would involve a change in the treatyand this certainly wouldwe could and we would veto it.
Lord Tomlinson: My Lords, is my noble friend aware that as a representative of your Lordships' House on the Convention on the Future of Europe, I remain constantly resolute concerning financial no-go areas such as tax harmonisation, as well as pursuing a more positive agenda to secure budget discipline and to maintain the United Kingdom rebate, as well as ensuring that the revenue side of a European budget is the responsibility of the Council of Ministers and the member states?
Lord McIntosh of Haringey: My Lords, I am encouraged to know that my noble friend is on message. Certainly, I know from his own conviction and experience that he agrees with us that there is scope for targeted changes in taxation to avoid unfair tax competition. However, that is different from tax
Lord Taverne: My Lords, I support the Minister. Is there not something inconsistent in opposing all forms of tax harmonisation? It has been generally agreed that certain forms of government subsidies to industry are anti-competitive and undesirable. The same effect can be obtained by special tax incentives which can be equally uncompetitive. Is it not therefore desirable that while in general retaining unanimity about tax changes certain forms of harmful tax competition should be eliminated?
Lord McIntosh of Haringey: My Lords, I think that is what I just saidand not just because I said it. It is true. That is why, if we take the example of business taxation, ECOFIN has, over a number of years now, been pursuing targeted measures of the kind that I referred to, which would be helpful to business, which would avoid unfair tax competition, but would not involve compulsory harmonisation. The noble Lord, Lord Taverne, is entirely right.
Lord Barnett: My Lords, I am not sure whether I am on or off message. I listened carefully to my noble friend's Answer. Would the Minister accept that, while taking the point he made, some tax harmonisation could be a positive benefit to the UK? Therefore, can I take it that he and the Treasury are not ruling out necessarily all forms of tax harmonisation?
Lord McIntosh of Haringey: My Lords, I am in danger of repeating myself. I thought that the noble Lord, Lord Taverne, had asked me that question and that I had answered it as well as volunteering the information. Yes of course there are some forms of unfair tax competition which are undesirable from a national point of view and from the point of view of business. If we can reach agreement on eliminating those forms of unfair tax competition and producing the fair tax competition to which I referred in my Answer to the noble Baroness, Lady Wilcox, it is to the advantage of all of us.
Lord Pearson of Rannoch: My Lords, are the Government not aware that it really will not matter whether they support any form of tax harmonisation if the Commission brings it forward as a single-market measure? If that happens, if we are outvoted and if the Luxembourg Court supports the Commission's use of the treaties, as it surely will, that will be that: we will be stuck with tax harmonisation of whatever form, whether we like it or not. Is not that what the treaties say?
Lord McIntosh of Haringey: My Lords, no, the noble Lord, Lord Pearson, is almost entirely wrong. No, on reflection I think that he is entirely wrong. Article 93, which is concerned with the harmonisation of indirect taxes for the purpose of the internal market,
Article 94, formally Article 100, which is concerned with direct taxation, provides only residual single-market powers; far fewer than Article 93. However, it too is constrained by the fact that it can be implemented only by unanimity.
Lord McIntosh of Haringey: My Lords, of the 15 member states in what the Opposition call the "tax burden" but which I prefer more accurately to call the "percentage of taxes and social security contributions as a percentage of gross domestic product"and I assume that that is the definition to which the noble Lord, Lord Mackie, referswe are 11th.
Lord Saatchi: My Lords, I hope that no one in Brussels is a reader of Hansard of your Lordships' House because the answer that the Minister gave to my noble friend Lady Wilcox could result in our expulsion from the EU. Is he aware that the president of the Convention on the Future of Europe, not a working group, says that he identifies a clear consensus in the convention for the scrapping of national vetoes on tax and has issued this specific threat to countries such as ours which reject tax harmonisation:
Lord Stoddart of Swindon: My Lords, I am pleased that we have just had a straight statement from the Minister that any attempt through the convention or through any other means to have tax harmonisation will be vetoed by this Government. Will the Minister confirm that, because I am a little worried that often Ministers make statements which are later altered? For example, the Government were not going to agree to a written constitution, to a single personality or a
Lord McIntosh of Haringey: My Lords, I have spent a number of the past few minutes agreeing with the noble Lords, Lord Taverne and Lord Barnett, who said that elimination of an unfair tax competition is of benefit to this country and that we will support that. Therefore, if the noble Lord, Lord Stoddart, wants an absolutely unequivocal statement by this Government that we will not agree to any measure which will bring our tax rates or tax base closer to that of other member states, he cannot have it.
Lord Newby: My Lords, does not the debate demonstrate why there is an urgent necessity to have a constitution for the EU? In the absence of such a constitution and of certainty on such matters, we engage in the same repetitive and debilitating discussions.
Lord McIntosh of Haringey: My Lords, I respond to Questions which are put to me in this House. I would never call them repetitive or debilitating. However, the question of a European constitution is wide of the Question on the Order Paper.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the NHS has long experience of having to deal with the consequences of terrorism and major incidents. As the National Audit Office has acknowledged, since September 11th 2001 NHS preparations have been stepped up to ensure that we are as prepared as far as we can be in responding to a range of possible new threats, such as the deliberate release of chemical or biological agents. But there is no room for complacency and we have implemented a vigorous programme of action with the NHS to ensure that it makes the right preparations.
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