Economic and Finance Council

HC Deb 17 December 1992 vol 216 cc372-3W

Mr. Burns

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. Lamont

The Economic and Finance Council of the European Community met in Brussels under my chairmanship on 14 December. The Paymaster General represented the United Kingdom.

Agreement was reached on the excise and value added tax simplification directives, which incorporate important provisions for the control of these taxes and amendments to the arrangements for operating indirect taxes in the single market after 1992. The simplification of the VAT requirements for so called "triangular" movements—involving traders in more than two member states—will be particularly welcomed by United Kingdom business.

There was a short discussion on the seventh VAT directive. The United Kingdom made it clear that we could not accept the provision in the draft directive on VAT for imports of works of art. Spain and Germany also had reservations on parts of the proposal which will now go forward to the Danish presidency.

Germany maintained its reservation on the increases in travellers' allowances for goods other than tobacco and alcohol. It is seeking progress in the discussions on the liberalisation of road transport before lifting its reserves. We shall be seeking to persuade Germany to lift this reservation.

Guidelines for the future control of duty-free sales in the Community were also agreed.

The Council considered again a package of measures concerning road transport taxation. It reached broad agreement on the minimum rates of vehicle exercise duty for lorries, subject to agreement on the related issues that are being considered by the Transport Council.

The Council also discussed a report on the Commission's proposal for a tax on carbon dioxide and energy. It agreed that before a decision could be taken on whether, and if so under what circumstances, such a tax should be introduced throughout the Community, further analysis would be required on the impact of the proposed tax, notably on energy consumption, economic activity and competitiveness.

Further work will also be needed on a number of important features of the Commission's proposal, such as the balance between the carbon and energy elements of the proposed tax, and the treatment of electricity. This work will take due account of the conclusions of the Edinburgh Council on the principle of subsidiarity.

The Council also agreed in principle that the derogation granted to Greece under the capital liberalisation directive should be extended for a further 18 months.

The Council also discussed the need to implement rapidly the national and Community measures agreed at the European Council in Edinburgh in order to promote growth. In particular, I urged that the new loan facility to be established by the European investment bank and the new European investment fund should be set up without delay.