HC Deb 27 November 1997 vol 301 cc1084-5
13. Mr. Gibb

If he will make a statement on his Department's policy towards the European Union paper "Towards Tax Co-ordination in the European Union". [16597]

Dawn Primarolo

The Government deposited an explanatory memorandum on 17 November on the Commission communication of 5 November 1997, "A Package to Tackle Harmful Tax Competition in The European Union." The issue was debated yesterday in European Standing Committee B.

Mr. Gibb

This European Union proposal, which the Chancellor of the Exchequer intends to agree to at Brussels on Monday, breaches the principle that the EU does not involve itself in direct tax policies of member states. Why do the Government think that it is necessary to do this?

Dawn Primarolo

As I explained repeatedly to the hon. Gentleman yesterday in Committee, the code is a voluntary agreement. There are no sanctions and it is not legally binding. It specifically recognises national competence in direct tax issues. There is no giving away of sovereignty on this issue. The hon. Gentleman is simply wrong.

Mr. Derek Twigg

Does my hon. Friend agree with the Leader of the Opposition when he says that we should realise a single currency for the next Parliament, or does she think that the shadow Chancellor is right when he says that we should not bind future Parliaments?

Dawn Primarolo

It will not surprise my hon. Friend to hear that I agree with my right hon. Friend the Chancellor and with the Government's policy on that issue.