§ Mr. Hanley
To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest meeting of the European Community's Economic and Finance Council.
§ Mr. Major
The Economic and Finance Council met in Brussels on 23 July. I represented the United Kingdom.
The Italian presidency outlined its objectives for the Council over the next six months. These will include preparation for the forthcoming intergovernmental conference on EMU, progress in the investment services, money laundering and capital adequacy directives, agreement on VAT and excise systems by the end of the year with a further discussion of the coverage of VAT rates, a further effort to strengthen mutual assistance in direct taxation, discussion of taxation in relation to the environment and transport, and consideration of a revision of the financial perspectives to take account of German unification. Economic and monetary union was discussed and I outlined our proposals for progress beyond stage one. It was agreed that these should be remitted to the monetary committee for further study. The German Finance minister, Herr Waigel, gave a short report on German economic, monetary and social union. The President of the Commission, Mr. Delors, gave an account of his recent visit to the Soviet Union.
The Council had an exchange of views on the Commission's latest proposals for VAT systems and for raising travellers' allowances. The Council will return to these subjects in October. The Commission asked for further discussion of excise rates at the October meeting and promised to table proposals on excise systems and structures before the end of September.
Finally a convention was signed which will provide a mechanism for solving transfer pricing disputes between tax authorities. This formed part of the package of three tax measures to encourage cross border co-operation which was agreed at the meeting of the Council on 11 June.