§ Mr. Radiceasked the Chancellor of the Exchequer if he will make a statement about the meeting of Finance Ministers in Brussels on 19th December 1977.
§ Mr. HealeyThe EEC Finance Council met under Belgian Presidency in Brussels on 19th December last. The United Kingdom was represented by the Permanent Representative to the EEC, Sir Donald Maitland.
The Council discussed action to be taken following the meeting of the European Council on 5th and 6th December The Council asked the Permanent Representatives Committee and the specialised economic and financial committees to examine the Commission communication—COM(77)620 Final—to the European Council on economic and monetary union. The European Council had spoken in favour of increased convergence of 619W short-term economic policies by better co-ordination of national short-term economic policy instruments and their insertion into a Community framework and procedure; the Finance Council undertook to examine this problem at a forthcoming meeting on the basis of reports by the various working parties and specialised committees to which it had entrusted the study of the Commission communication—R/2355/77—on the matter. The Finance Council also requested the Commission to submit as soon as possible a proposal for the establishment of a new instrument for Community lending and borrowing in accordance with its instructions from the European Council.
After examining a Commission proposal, based on a Belgian Presidency initiative, the Council adopted a decision, subject to a waiting reserve, to expand and strengthen the mechanism for medium-term financial assistance.
The Council adopted a regulation governing the calculation and paying over of VAT own resources, and a regulation laying down budgetary and financial provisions to govern the accounting, and the availability and use, of the Communities' own resources from 1st January 1978.
The Council adopted the Fifth Directive on tobacco taxation dealing with the second stage of cigarette tax harmonisation. This is to run from 1st July 1978 to 31st December 1980, and during this period the specific element of the duty on the most popular price class of cigarettes is to amount to between 5 per cent. and 55 per cent. of the total taxation—including VAT. The directive also provides for the United Kingdom to have a derogation from the requirements of the First Directive to permit the imposition of a supplementary duty for the twoand-a-half-year period to 31st December 1980 on cigarettes with a tar yield of 20 mg or above.
The Council adopted a directive on mutual assistance between member States in the field of direct taxation authorising the taxation authorities of member States to exchange information for the purpose of preventing evasion or avoidance of direct taxes on income and capital, subject to safeguards to protect the legitimate interests of taxpayers.
The Council adopted a directive granting Denmark a derogation for a five-year 620W period beginning on 1st January 1978 from the application of the harmonised rules relating to travellers' duty-free allowances.
Mr. Tugendhat, the EEC Commissioner with responsibility for budgetary matters, made a statement to the Council on the implications for the Communities' budget of the Commission's recent proposals on agricultural prices.