Commentary: Lamont plays to the Brussels rules
Wednesday 01 July 1992
At first the row between Britain and the rest over VAT is like one of those disputes among medieval theologians. Nothing would actually have forced Britain to change the way it raises VAT. The standard rate of 17 1/2 per cent would remain, and so would the right to retain politically sensitive zero rates.
All Britain's partners wanted was to make it illegal for an EC country to cut its standard rate below 15 per cent. The sensible reason for this proposal is simply fear of 'fiscal dumping', in which countries in a borderless Europe would try to attract customers from their neighbours by charging less VAT. The result would be plunging state revenues and soaring deficits. The new minimum rate also helps EC member states to do what many of them need to do anyway, which is to raise more tax.
Happily, the Chancellor, Norman Lamont, has climbed down from what always appeared a quixotic position, namely that any minimum tax rate was an
unwonted interference in the sovereign rights of nation states. Forced to choose between a duff issue of principle and practical questions such as the discriminatory treatment of whisky, a subject close to any Scots Chancellor's heart, he went for the expedient deal. Although nothing was finally agreed, there should be a deal on 13 July.
Mr Lamont has made real progress elsewhere. Drafts of the capital adequacy directive, which sets minimum capital requirements for investment firms, had seriously threatened many of London's independent stockbrokers, who would have been at a disadvantage compared with the Continental style of bank-owned firms. But the version that has been agreed, setting the minimum at ecu50,000 for firms that do not hold clients' money, is reasonable.
There was also relief in the City yesterday about the investment services directive, which once looked as if it could kill off London's huge foreign exchange and Eurobond markets. The disclosure requirements had threatened to alert a market-maker's rivals whenever it took a
large position in a stock, but they are now acceptable to the professionals.
Only the insurance directive failed to create enthusiasm, mainly because there is a great difference between passing laws and changing cultures. It will be years before UK insurers crack the Continental market - but, given their recent track record, that may be no bad thing.
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...