Common Consolidated Corporate Tax Base

Chris Ruane Excerpts

Wednesday 11th May 2011 Commons Chamber

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Chris Ruane (Vale of Clwyd) (Lab)]

He’s up off his chaise longue.

--- Later in debate ---

[Jacob Rees-Mogg]

My hon. Friend leads me away from the essential point, which is that the EU does not have any authority over direct taxation, whether it is approximating it or not, so the approximation is irrelevant in relation to direct taxation because the treaties do not provide for that. If the treaties do not provide for it, then the EU cannot provide for enhanced co-operation without a specific treaty amendment, which would of course be a separate veto-able activity under the treaties as they exist.

We often complain about European law, and I do not like the fact that laws made by this Parliament can be overturned by the European Court, but as that is the world in which we live, when European law is on our side we ought to use it. So I reiterate my plea to the Minister in the European Councils to say that we are uncertain of the legal base and that we would like a clear legal judgment from the European Court of Justice before we proceed with further negotiations.

Now there is also a fall-back position, as my hon. Friend the Member for Stone (Mr Cash) said. If the European Court of Justice were, as a federalising court, to invent a legal base, we could then come back to the point of subsidiarity, where this debate is so relevant and important. We are putting the argument to Europe and saying, “You have put these fine protections into the treaties. You have used these grand-sounding words—not as clear as the 10th amendment to the United States constitution, but none the less words that are supposed to protect the rights of sovereign member states. Let’s now see if you mean it. Let’s now see if you, the Commission, will accept the argument for subsidiarity, and if you won’t, whether the court will back it up and whether the proposals will fall on that basis.”

If all this fails, then I accept the Minister’s position. I must confess that it is a reassurance to those of us on the Eurosceptic wing of the party that it is the Minister who will be conducting the negotiations, because at least we know that it is not, as some on the Opposition Benches would have said, a woolly Liberal negotiating. It is somebody who wields a handbag in as fine a way as the great lady—[Interruption]—the blessed lady, so we have confidence that the Government’s negotiations will be tough.

It is fair enough to go through a process, if that is where we end up, but ultimately the response must be no, not least because tax competition is a thoroughly healthy thing.

[Chris Ruane]

If the Chief Secretary to the Treasury has forced the Minister’s hand, and has forced a veto, should he be known as Danny DeVeto?

[Jacob Rees-Mogg]

I heard that joke when it was made from a sedentary position. I thought it was funny five minutes ago, and it has got better by being shared with the whole House. It is a shame that all the sketch writers have gone home, or the hon. Gentleman would have had a lead in the papers tomorrow.

Let me conclude on this point: tax competition is healthy. It is good for nations and benefits Europe, companies and, ultimately, Government tax revenues. So we have a Minister battling for us who has three things that she can say. First, the draft directive is illegal under the treaties as they stand; secondly, the House of Commons believes that it does not meet the requirements of subsidiarity; and thirdly, it is a dreadful idea anyway and it ought to be binned.