Gordon Brown Threatens EU Colleagues With Beheading

by Ulrika Lomas, Tax-News.com, Brussels

11 July 2001

EU Finance Ministers competed yesterday at the ECOFIN meeting in Brussels to show off their knowledge of history, telling Didier Reynders, the Belgian Finance Minister who wants to impose a eurotax to finance the Union, about taxes which have caused wars and revolutions in the past.

First Dutch finance minister Gerrit Zalm recalled that the imposition of a tithe on the Netherlands by the Spanish Governor-General Duke of Alba in the 16th century caused an 80-year war of independence (eurosceptics take note - the way to destroy the Union is to encourage the eurotax!).

Then Irish Finance Minister Charlie McCreevy told of how Ireland's ex-colonial master England had precipitated the American revolution by imposing a stamp duty.

UK Chancellor Gordon Brown got personal with his footnote: a predecessor in the 14th century had been beheaded when he tried to impose a poll tax (poll taxes are particularly dangerous for their progenitors - ask Mrs Thatcher).

Mr Reynders didn't flinch, though, and gamely persisted with the eurotax agenda item in the face of opposition from more than half of the assembled Finance Ministers. In fact the eurotax is just one element of the underlying 'harmonisation' agenda, and there is support among many of the Ministers for harmonisation of VAT and excise rates. Not including Gordon Brown though, who said: "Tax harmonisation is not necessary for the single market to work or for the single currency to work."

Mr Brown thinks that the EU should be concentrating on completion of the single market rather than tinkering with tax harmonisation. He pointed out that a UK citizen could buy a holiday from another member state over the internet but not the travel insurance to go with it, while it was possible to buy a washing machine from another EU member state but not the warranty. He told his colleagues that Brussels should concentrate on economic reforms and not seek to impose an extra levy on its citizens to cover the community’s annual £60 billion running costs.

Even usual allies Germany and Luxembourg deserted Mr Reynders yesterday. Hans Eichel, German Finance Minister, did not consider the EU tax "an issue for the present", while Jean-Claude Juncker, Luxembourg Finance Minister and Prime Minister, said the tax should be discussed but admitted: "Europe's citizens do not seem to be clamouring for it." French Finance Minister Laurent Fabius said he had nothing against a brainstorming session on the tax, but recalled that among the many demonstrations in front of his ministry there were "very few with banners seeking a European tax".

At the end of the meeting an undeterred Mr Reynders said Belgium would push the idea at September's informal meeting of finance ministers and the December EU summit in Laeken outside Brussels.

"As well as the condition that the tax must not increase the overall tax burden, I now know of the need to avoid a war in the Netherlands and a revolution in the UK," he said.

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