EU Commission sends good news on VAT (and a stark lesson on sovereignty)

July 08, 2008 3:37 PM

Ctv_coalitionThe EU Commission issued a press release yesterday proposing a cut in the rate of VAT on house repairs and improvements, which is encouraging for the prospects of the Cut the VAT campaign.


With over 100 MPs signed up to the Early Day Motion supporting the campaign, and a number pledging to raise the issue with the Treasury, pressure for a cut has been mounting - topped by the delivery of a 10,000-signature petition to Downing Street (see right). It's encouraging that the Commission have taken on board the message, but there's still a great struggle ahead to achieve the VAT cut.


Any VAT reduction requires unanimous agreement by all EU member states, once it has been proposed by the Commission. By allowing the EU to take control of this particular tax, our democracy has been hobbled. I've argued before that tax competition is a good thing, but even if you think it's a heinous sin, reducing VAT on home improvements is hardly unfair competition - these aren't tradable, mobile goods or even services you can register for under a flag of convenience, they're houses, which are about as fixed as assets can be.


But to stand any chance of reducing VAT on repairing our homes, we don't just have to persuade the Government, we have to persuade the EU Commission and 26 other Governments across the European Union. I still think it's worth doing, but it's absurd that how much tax should be charged on someone doing DIY in Walsall should be able to be decided by a Government sitting in Warsaw.


On this occasion, so far, we've been fortunate in that the Commission are at least suggesting the idea - and even then it will be an uphill slog to achieve a reduction, requiring the UK Government to wield genuine "top table" influence to persuade the other nations - something which would be in stark contrast to the bulk of British experience at Brussels.


Whilst these are encouraging noises from the Commission, there is a salutory lesson to be learned from the difficulty of securing a reduction even in one, sector specific area. Once sovereignty is given away - or "pooled" as the EUphemism has it - to Brussels, it is a hell of a lot more difficult for democratically elected countries to do what their voters want. For that reason, as well as so many others, we should not let Brussels get its hands on Justice and Home Affairs or Defence as is now being suggested in the cause of "ever closer union".

Ctv_coalitionThe EU Commission issued a press release yesterday proposing a cut in the rate of VAT on house repairs and improvements, which is encouraging for the prospects of the Cut the VAT campaign.


With over 100 MPs signed up to the Early Day Motion supporting the campaign, and a number pledging to raise the issue with the Treasury, pressure for a cut has been mounting - topped by the delivery of a 10,000-signature petition to Downing Street (see right). It's encouraging that the Commission have taken on board the message, but there's still a great struggle ahead to achieve the VAT cut.


Any VAT reduction requires unanimous agreement by all EU member states, once it has been proposed by the Commission. By allowing the EU to take control of this particular tax, our democracy has been hobbled. I've argued before that tax competition is a good thing, but even if you think it's a heinous sin, reducing VAT on home improvements is hardly unfair competition - these aren't tradable, mobile goods or even services you can register for under a flag of convenience, they're houses, which are about as fixed as assets can be.


But to stand any chance of reducing VAT on repairing our homes, we don't just have to persuade the Government, we have to persuade the EU Commission and 26 other Governments across the European Union. I still think it's worth doing, but it's absurd that how much tax should be charged on someone doing DIY in Walsall should be able to be decided by a Government sitting in Warsaw.


On this occasion, so far, we've been fortunate in that the Commission are at least suggesting the idea - and even then it will be an uphill slog to achieve a reduction, requiring the UK Government to wield genuine "top table" influence to persuade the other nations - something which would be in stark contrast to the bulk of British experience at Brussels.


Whilst these are encouraging noises from the Commission, there is a salutory lesson to be learned from the difficulty of securing a reduction even in one, sector specific area. Once sovereignty is given away - or "pooled" as the EUphemism has it - to Brussels, it is a hell of a lot more difficult for democratically elected countries to do what their voters want. For that reason, as well as so many others, we should not let Brussels get its hands on Justice and Home Affairs or Defence as is now being suggested in the cause of "ever closer union".

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