Fury at French and German plot to TAX Britain: Grubby EU tax rate threatens UK jobs
FURY has erupted after a secret French and German plot to slap a crippling new tax rate on Britain was exposed.
Officials in Paris and Berlin have drawn up plans for a minimum corporation tax levy across all 28 EU member nations, Brussels sources revealed yesterday.
Critics fear it will undermine the UK economy by imposing soaring costs on business, wrecking job creation.
The plan, labelled a “brazen tax grab”, is a blow to David Cameron’s hopes of keeping Britain in the EU.
Ukip deputy leader Paul Nuttall said: “Germany and France have given up the pretence they will allow states to continue to control their own taxation.
“When Germany and France say the EU imperative for ‘ever closer union’ must stand, they mean it – closer political union, closer economic union and closer fiscal union.”
Senior Tory MP John Redwood said: “The eurozone is going to need a lot more common government – common taxation and control over borrowing and spending.
“This is another good reason why we need a new relationship with this emerging political union.”
The corporation tax plan is understood to be part of an accord between German Chancellor Angela Merkel and French President Francois Hollande for tighter economic and political union in the 18-nation eurozone.
Their push for closer ties is at odds with Mr Cameron’s hopes of repatriating powers back from Brussels to Westminster.
He is almost certain to face resistance to his demands for changes to EU treaties when he holds separate talks with the two leaders in Paris and Berlin later this week.
A leaked document, disclosed by the French newspaper Le Monde, showed that President Hollande and Chancellor Merkel believe EU reforms can be “developed in the framework of the current treaties”.
The two leaders are set to put their plan to a summit of European leaders in Brussels on June 25, when the Prime Minister is also expected to reveal his shopping list for a new EU deal for Britain.
He plans to put that deal to voters in an in-out EU referendum by the end of 2017.
The blueprint for a harmonised EU corporation tax was revealed by the German financial magazine Handelsblatt Global yesterday, quoting a source close to the European Commission.
And an official in the German finance ministry said: “The discussion of tax rates has begun.”
When Germany and France say the EU imperative for ‘ever closer union’ must stand, they mean it – closer political union, closer economic union and closer fiscal union
French and German finance officials believe a harmonised corporation tax could make multinational giants such as Amazon and Starbucks less able to move bases around so they benefit from the lowest rates.
Britain’s corporation tax is currently 20 per cent, one of the lowest in Europe. It is significantly lower than the 33.33 per cent rate in France and 29.65 per cent in Germany, raising fears the UK rate will have to rise.
Alan Murad, of the cross-party Eurosceptic campaign Get Britain Out, said: “Brussels imposing a common corporation tax will be the most brazen power grab we have witnessed.
“This is using the EU to undercut competitive countries like Britain. The outcome will be to reduce our competitiveness in global trade. Jobs will be lost and wages reduced.
“It is a policy based on resentment of Britain’s economic performance.
“It sets a terrifying precedent when decisions about our tax rates are made by faceless bureaucrats in Brussels instead of elected officials in Westminster. This demonstrates why we should get Britain out.”
The Prime Minister’s EU charm offensive began on Monday evening with a dinner at Chequers with European Commission President Jean-Claude Juncker.
Mr Cameron’s official spokesman said: “The British Government has a long-standing view on tax harmonisation, which is not to support it.”
