Tax French wine and German cars

Anthony Browne
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IT is a truth universally acknowledged that Europeans drink too much, and also drive too much. There is a simple way to combat these social evils at the source, which the British government should push – new pan-EU taxes on wine production and on car production.

France and Germany can’t complain that these taxes are targeted at their key industries – it follows their proposal for a financial transactions tax, or Tobin tax, which is overwhelmingly targeted at London.

An analysis by the think tank Open Europe suggests that of the €81bn (£71bn) it could raise, €58bn would come from the UK.

The wine and car taxes are also less likely to be instantly fatally flawed – unlike financial transactions, which can move at the press of a button, it is difficult to relocate vineyards and car plants.

The Tobin tax was rightly met with a barrage of criticism last week: Angela Merkel and Nicolas Sarkozy are pushing a tax to win support among their voters, safe in the knowledge that the British government must veto it.

But the episode tells us a lot about why we mustn’t give in to the EU’s craving to have its own taxes. The European Commission already keeps trade levies, and gets a proportion of national VAT receipts, but it is desperate for its own tax-raising powers.

EU institutions are not sufficiently democratically accountable to be trusted to impose taxes on Europeans. The permanent obsession in Brussels is building Europe, divorced from the concerns of ordinary Europeans.

That is why EU institutions can propose massive budget increases when all member states are struggling to cut their own budgets: Brussels doesn’t have to face the wrath of squeezed voters.

Unlike all national governments, the EC is not controlled by democratically elected ministers that angry voters can – and do – throw out.

European elections are held, but they do not change the European executive government, just the mix of the European parliament: it is as if Americans were allowed to vote for Congress but not the President.

The Americans once taught British politicians a lesson about tax and democracy, and it is a lesson that Brussels needs to learn: there should be no taxation without representation.

• Anthony Browne is a board member of theCityUK