ECOFIN (17 November 2010)

Tuesday 16th November 2010 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

The Economic and Financial Affairs Council will be held in Brussels on 17 November 2010. The following items are on the agenda:

Directive and Regulation on VAT treatment of insurance and financial services

ECOFIN will hold an initial discussion on proposals to modernise the VAT exemption for financial services, reflecting market developments over the last 30 years. In addition to a proposal to amend the VAT directive, the European Commission has proposed a detailed regulation that would ensure the law is applied consistently across the EU.

The Government are keen to promote economic growth and competitiveness through modernisation of the legislation, increasing certainty and reducing compliance costs for business, and ensuring fairness of treatment, while at the same time protecting UK revenues and limiting opportunities for avoidance.

The Government will continue to seek harmonised VAT exemption for financial derivatives and for investment management aimed at retail investors, as well as equal treatment for outsourcing across the whole sector. The Government will also reject any proposals to remove Government choice in respect of the option to tax.

Implementation of the 2009 budget

The Court of Auditors will present its annual report. The UK continues to press the case for value for money and greater accountability in the EU budget.

Follow-up to October European Council

ECOFIN will take note of the deliberations of the European Council, especially as regards the taskforce report on economic governance and levies and taxes on financial institutions.

The European Council endorsed the taskforce report which explicitly excludes the UK from any sanctions flowing from economic governance reforms. With regards to levies and taxes on financial institutions, the Government strongly support national levies on banks and other tax measures where appropriate to complement wider reforms aimed at reducing the probability and impact of banking failures.

Follow-up to the G20 Seoul Summit on 11-12 November

Ministers will hold an exchange of views on the main outcomes of the G20 summit, which is scheduled to discuss the following issues of interest to ECOFIN: the global economy and imbalances, the framework for growth, reform of the International Monetary Fund, financial regulation, and trade.

Financing of measures against climate change

ECOFIN will adopt conclusions on financing of measures against climate change. The Government support the conclusions, which will build credible action on the ground and strengthen the EU position at the UNFCCC climate negotiations in Cancun in December.

Pensions

The Council will adopt conclusions on a report on pensions. The Government welcome this report: it emphasises the importance of fiscal sustainability and extending working lives; and that the focus of EU activity in this area should be on exchanging country experiences and collecting comparable data and information.

EU statistics

The Council will adopt conclusions on the annual report on EU statistics, which reviews the progress made on statistical governance. It welcomes the support given by Eurostat to provide assistance to Greece in the area of statistics; the efforts of the Greek authorities to correct deficiencies in this area; the recommendations of the Van Rompuy taskforce to strengthen EU statistics; and progress made in the revision of the European system of accounts. The Government are content with the conclusions as drafted.

Baltic Sea area

The European Investment Bank will give a presentation on its contribution to the European strategy for the Baltic sea area, followed by an exchange of views by Council. The Government welcome the work of the EIB in the Baltic sea region, which aims to make the region environmentally sustainable, prosperous, accessible, attractive, safe and secure.

Representation of the Council at the G20 ministerial meetings

Ministers will discuss the presidency proposal that the EU should be represented by the Commission in the G20 finance ministerial meetings. The Government do not see a need to change the existing arrangements, whereby the EU presidency represents the EU and the Commission is an observer.

Meeting of the EU and EFTA Ministers of Finance and Economy

Ministers will meet their European free trade area counterparts and discuss topical issues of mutual interest, including financial regulation and intelligent fiscal consolidation.