§ Ms QuinTo ask the Chancellor of the Exchequer if he will make a statement on the outcome of the EC Economic and Finance Council held on 25 October.
§ Mr. Kenneth ClarkeThe European Community Economic and Finance Council—ECOFIN—met in Luxembourg on 25 October. I represented the United Kingdom.
Political agreement was reached on proposed secondary legislation designed to ensure that certain treaty provisions relating to stage II of European monetary union are consistently applied. I made clear that the proposed legislation was still under consideration by our scrutiny committees. Subject to that, final adoption of the proposed legislation is conditional on the entry into force of the Maastricht treaty and the opinion of the European Parliament. The Council looked favourably on the candidacy of Alexandre Lamfalussy, the outgoing managing director of the Bank of International Settlements in Basle, for the position as first president of the EMI.
The Commission circulated a report on progress made on the growth initiative since the Edinburgh declaration in December last year. All member states indicated their intention to complete the remaining procedures to establish the European investment fund by the end of the year. The Council also indicated broad support on widening the scope of the temporary EIB lending facility established by the Edinburgh European Council. I continued to stress the themes in the United Kingdom contribution to the Commission's White Book. A copy of the United Kingdom's contribution is available in the House Library.
The Council had its first discussion of a proposal to amend the scope of the UCITS—undertakings for collective investments in transferable securities—directive which sets minimum standards for the regulation of certain collective investment schemes. The Council agreed that work should continue in the light of the forthcoming
118W1994–95. The 1987–88 income tax regime has been indexed to 1993–94 and 1994–95 by reference to the statutory formula and allowing for independent taxation.
opinion of the European Parliament and a study by the Commission of the macro-economic impact of the proposal.
The Council discussed a proposal for an EC-wide withholding tax on interest from savings, directed at the distortions some other member states believe arise as a result of the differing systems in the Community for the taxation of interest. With support from some other member states, I made clear the Government's doubts about the need or likely effectiveness of a Community-wide approach. The presidency decided to remit the dossier back to the working group.
The Council adopted a directive on road haulage, tolls and user charges implementing the political agreement on these matters which was reached by the Transport Council in September. There was also final political agreement on the increase in travellers' allowances provisionally agreed during the United Kingdom presidency in November 1992. The tax free allowances will rise from 45 to 175 ecu for travellers from third countries and from 45 to 90 ecu for intra-Community travel. The agreement will be reviewed in 1995 and includes a derogation covering the eastern borders of Germany lasting until 1997. The Council also adopted an important regulation liberalising road haulage cabotage at the same time.
The Commission presented a report on the functioning of the indirect tax system in the single market in its first six months and applauded the efforts of national administrations in introducing the new systems.
The Council also noted the recent Commission proposal —8994–93—about changing the way in which annual surpluses and deficits are treated in the EC budget to produce a more regular cash flow. It was clear that the proposal was unacceptable to many member states. However, the Council agreed to look at alternative ways of attaining the same end, subject to respecting fully the annual ceiling on own resources.
There were no formal votes. The decisions on the road transport liberalisation legislation were taken by consensus.