Bruges Group research shows that the EU’s financial regulations are set to destroy thousands of well-paid jobs in the City of London. The EU now threatens the long term prosperity of the City of London and, by extension, the London and UK economies. How is Britain to remain a well-paid, successful and influential nation in the 21st Century world economy? We should be concentrating on such activities as financial services, marketing, design, advertising, legal work, accountancy, publishing, journalism, business information, the arts and the various forms of management consultancy. We should also want the UK to be the headquarters for companies with production facilities across the globe. Yet threats are emerging to Britain’s long-term prosperity. In September the European Commission submitted new and sweeping proposals for a European Systemic Risk Board. This is to include the so-called “European Banking Authority”, which is to have far-reaching powers. In the current proposals they include the authority to close down a particular bank or insurance company, regardless of the views of the UK’s own regulators. The proposed Directive on Alternative Investment Fund Managers, which in practice means managers of hedge funds and private equity funds, is interventionist and prescriptive. Not only will it cramp the operations of alternative investment managers who have long records of good performance, but also it will cause the relocation of well-paid and talented professionals to centres outside the EU. Britain’s exports of international financial services grew by 15% a year for over 15 years, a really serious growth industry in which the UK is a world leader. The EU will ruin this. How many people will be affected? Total employment in international financial services in London is approaching ½ million people. There may be about 250,000 in the Square Mile itself. Around 20% – 25% of those will be affected by the EU’s plans with the potential loss of tens of thousands of well-paid jobs. These jobs – like those in manufacturing – will be forced out of the UK; losing Britain many talented professionals. Almost certainly the financial services industry will go to Asia. We must do everything we can to put pressure on our politicians to hold a referendum on the Lisbon Treaty after the forthcoming general election. Click here to read the full publication online British taxpayers will lose at least £9.7 billion due to rulings by the European Court of Justice. Commentators on the HSBC SDRTcase have suggested that it will cost up to £5 billion, the UK Government's estimate for the FII GLO case is that it will cost taxpayers another £4.7 billion, and the estimated total of those (£9.7 billion) does not even taken into account the Thin Cap GLOor the Cadbury Schweppes CFC tax cases, both of which the Government is currently fighting in the courts. Yet these tax blows to the nation’s finances, coming at a time when the Government is struggling with our huge national debt, could have been prevented. However, Ken Clarke and his successor, Gordon Brown, as Chancellor failed to act on advice to amend EU tax rules. Now the only option to protect British tax law from EU interference is for the UK to regain its freedom. Sensational evidence produced in a recent tax case1 shows that Ken Clarke, when he was Chancellor of the Exchequer, failed to defend the UK’s tax rights, despite clear warnings from Inland Revenue officials that the ECJ would erode the UK's tax base. Furthermore, it is highly likely that his successor, Gordon Brown, also failed to act. Warned, as early as 1994, that the only solution was for the UK to obtain clear tax exemptions from the EU, then either from incompetence or neglect, Clarke ignored advice, probably also given to Brown, to seek changes that could have saved the UK Exchequer billions. It is scandalous that the advice of Inland Revenue officials to seek a Treaty carve-out for tax, has been ignored by successive governments. It is clear that the approach of Ken Clarke and Gordon Brown has cost the UK Exchequer £billions as HMRC now loses tax case after tax case on EU law, when if the officials advice had been followed these cases may not have arisen. The Labour government claims to have secured a red-line protecting the UK from the EU taking power over taxation. The evidence now shows that it waved a white flag. Background In Test Claimants in the Thin Cap Group Litigation v Commissioners for Her Majesty’s Revenue & Customs [2009] EWHC 2908 (Ch) evidence was produced that showed disregard by Ken Clarke of official advice that the UK’s tax powers were under threat. Actions of the Treasury under Ken Clarke’s Chancellorship In July 1994, a policy memorandum from a senior Inland Revenue official, headed “EC: Direct Tax: European Court of Justice” outlined the issue as “Early warning of problems ahead with the Court of Justice applying the principles of the Treaty to national tax provisions”. The summary of that memorandum states the following: Young further wrote to Ken Clarke on 1st November 1994, referring to the risks of judicial lawmaking by the ECJ in taxation, and strongly recommended that the issue of the ECJ overriding UK tax law be made a priority for the UK agenda for the 1996 Inter Governmental Conference. He wrote: “since Treaty revision is the only long-term solution”.6 Less to his credit, the Financial Secretary did also recommend keeping the issue off the political agenda, due to “avoiding shock/horror politicking from the Eurosceptical tendency in Parliament”. Not only did this ignore the fact that the Eurosceptics would have been proved right, it reduced the UK’s chances of getting the momentum required, both in the UK and abroad, to force the necessary Treaty changes. Actions of the Treasury under Gordon Brown Amazingly, the disclosures made in the Test Claimants tax case cover no discussion of such issues between July 1997 and February 2001, a period during which only Gordon Brown was Chancellor. Questions have to be asked as to why there was no evidence in the case covering this period. During this period the ECJ ruled on a number of cases, including at least one UK case7, which made clear to the tax community that EU law is being used to force through tax harmonisation via the back door8. There was a major UK House of Lords case, where ICI successfully argued for greater tax relief, because of EU rules.9 Given that litigation, it is highly unlikely that at no time during those 4 years, did Treasury or Inland Revenue officials provide a briefing to the Chancellor of the Exchequer on matters clearly identified in 1994 as having a detrimental impact to HMRC. And its highly unlikely that such briefings did not make the same recommendations as in 1994, to seek treaty amendments, recommendations which if made public will be highly embarrassing to the now Prime Minister. References ------------------------------------------------------------------------------- For further information contact: Robert Oulds Director The Bruges Group 227 Linen Hall, 162-168 Regent Street, London W1B 5TB UK Tel: +44(0) 20 7287 4414 Mobile: 07740 029787 E-mail: info@brugesgroup.com Britain has consistently been ahead of the game where EU railway legislation is concerned. We broke up a monolithic network, ran private trains and encouraged competition long before the EU told us to. However, as Britain’s horizontally fragmented network - the uniquely British franchise system - is in tune with Brussels’ thinking, if we wanted to revert to either a nationalised railway or vertical integration along the lines of the pre-nationalisation era, we could not actually do so while a member of the EU. And even with the current convergence between Britain and Brussels on many railway matters, European legislation has caused far more problems for our railway network than would be expected, due to Brussels’ obsession with breaking down national barriers. Having eliminated border crossings in the Schengen Area, the EU is determined to create a harmonised pan-European rail network similarly free from national boundaries. Click here to read the full research online In Cool Thinking on Climate Change Roger Helmer, backed up by substantial evidence, shows that the EU’s climate alarmism is both mistaken and dangerous. Evidence is quite clearly emerging that man is not having the impact on the climate that the EU climate alarmists claim. They have failed to note that throughout Earth’s history temperatures have exceeded today’s levels. There have been warm periods followed by cyclical cooling, as there will be again. Ignoring the doubts, the European Commission proposes to forge ahead with eyewateringly expensive initiatives designed to mitigate climate change. Key elements of this package include the extension of the Emissions Trading System (known internationally as “Cap’n’Trade”); the Clean Development Mechanism (CDM, an international extension of ETS); a framework for carbon capture and storage (which is not yet operational on an industrial scale); strict renewables targets; and a directive on CO2 emissions from cars. The estimated cost of these programmes is €73 billion a year across the EU by 2020. In the UK, it will cost £9 billion a year by 2020. It is expected to force a million more households into fuel poverty. These policies are likely to raise average domestic fuel bills by up to £200 a year, while the total economic cost would average around £600 per family. So why is the EU pursuing the climate issue with such vigour? Partly it is being used to win support from the ‘green’ lobby as part of the EU’s civil society initiatives to try and gain legitimacy via its favoured NGOs rather than through democratic means such as referenda. Climate alarmism is also an excuse for yet more power-grabs. The whole issue is being used by the EU to take more power, not only over the environment and energy, but also over other areas ranging from immigration to foreign policy. The simple truth is that the back-bone of Britain’s energy policy needs to be coal and nuclear energy, not the fantasy of renewable energy as pushed for by the European Union. Otherwise Britain will face an energy crisis with the very real prospect of the lights going out. Click here to read the full publication online David Cameron’s decision to renege on his “cast-iron” guarantee to hold a referendum on the Lisbon Treaty has evidently disappointed a great many people, but will have surprised relatively few. While the Cameron volte face probably means that the European problem has been temporarily defused, his decision to backtrack will have a number of undesirable consequences: it will add to the public’s profound cynicism about politics – a subject which the Tory leader has repeatedly promised to address – and it will make the task of “renegotiation” considerably harder, perhaps even impossible, to achieve. A referendum on the Lisbon Treaty would not have had the effect of exempting Britain from the treaty provisions but it would have served to strengthened the hands of the British negotiators in seeking to return powers from Brussels to Westminster; a referendum on specific proposals to renegotiate the terms of British membership would have a similar effect. Both courses of action would provide a stronger mandate made for renegotiation than a commitment made in a general election manifesto. In rejecting a referendum, Mr Cameron is perpetuating a style of politics which effectively disenfranchises the British people on EU and related issues; this will have effect of increasing the deep mood of public cynicism with politics generally. Until he, or some other political leader, can find away to reengage the electorate in the decisions over Britain’s political future and shapes policy accordingly, British politics will remain “broken.” Click here to read the full research online This paper charts how Britain became entangled in the anti-democratic European Union. And outlines the damage this has caused to our own self-government; including how the European Union dominates legislation in the United Kingdom. On the most conservative estimate over 65% of new legislation emanates from the EU. This study also looks at how the European elites are in danger of creating a profound moral and institutional crisis in Europe – a crisis of democracy. Those in the Brussels elite who have power have not been elected, and those who have been elected have no power.
The EU and its attack on Britain’s most successful industry The City of London Under Threat
Professor Tim Congdon
EU court ruling shames Ken Clarke Taxpayers to lose £9.7 billion
And that the cost could run into:
The same Inland Revenue expert added in August 1994 that:
It is clear that the Financial Secretary at the time, Sir George Young, clearly understood the danger, as outlined in an October 1994 note to Ken Clarke where he wrote: “But this, I fear, is only a minor example of the problems we will face in dealing with the Halliburton decision, and other major ECJ decisions in the future.”5The impact of European Union legislation on Britain’s railways On the Wrong Track
John Petley
The longer Britain remains in the EU the longer we will be locked into its thinking on railways. Even as things stand, with so few international trains ever likely to run in Britain compared with other member states, the benefits of regaining control of our railways are obvious. Surely the nation that gave railways to the world deserves the freedom to determine the direction that its own network should take. Why the EU’s climate alarmism is both mistaken and dangerous Cool Thinking on Climate Change
Roger Helmer MEP
The Cameron approach does further damage to Britain’s ‘broken politics’ Tory ‘renegotiation’ is a slogan not a policy
Gerald Frost
The United Kingdom and the European Union Our Fight for Democracy
John Strafford
Thursday 24 December 2009
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