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that Britain is one of the few EC members without VAT on a range of essential items? These include:

In 1977, the Labour Government caved in to the EC and agreed that Britain’s zero-rating for these items was only temporary. (The last VAT review in 1998 maintained this stay of execution). The Daily Telegraph (22.4.97) reported that the EC regarded lower-rate VAT on fuel as a temporary step towards full-rate VAT.

Writing in Taxation (5.3.98), Francesca Lagerberg ACA wrote that VAT-exempt financial and insurance services are also at risk. She pointed out how mortgage interest and deposit accounts might be affected.


EC document COM(96)328, produced in July 1996, reveals a lot about the Commission’s plans for VAT harmonisation

A European Commission pamphlet glorifying the EC (obtained in 1996) claimed that harmonisation was a thing of the past, and that a less intensive ‘approximation’ of rules was now the vogue! Yet publications dating back to 1986 and 1975 show that tax harmonisation has permanently been on the agenda!


Under the terms of our EC membership, the Commission can make its own absolute rulings (‘decisions’ or ‘regulations’). Britain does not have a veto over rulings passed under ‘distortion of competition’ ('Maastricht', Art. 3(g)).

The abolition of our rights to duty free shopping shows that the EC is serious about using its powers. We are moving fast towards being absorbed into "a country called Europe".

Tough luck on the worst off sections of society, such as pensioners and the lower-paid!

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This page updated: 11 January 2000; link updated: 26 December 2005