Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-12-03-Speech-3-187"

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"Mr President, are taxes only a means of generating income for the treasury, or can they also be used to serve other purposes of government policy? This is, in actual fact, the underlying core question on which I, with others, and Commissioner Bolkestein fundamentally differ. What is more, it looks like he is increasingly on his own in his puritan rejection of the use of the instrument of reduced rates of VAT, which is still being deployed as an experiment, to promote employment. At the time of the autumn 1997 employment summit in Luxembourg, the idea of reduced rates of VAT was mooted here in this Parliament. This idea already met with resistance then from the Directorate-General dealing with tax cases and from a number of Member States. Despite this, it was decided to carry out, in a very select number of labour-intensive sectors, an experiment which would definitely not result in any cross-border distortion of competition. It was in these that the Member States were allowed to apply the reduced rates of VAT. However, it had to remain an experiment, limited in time. People could not agree beforehand on clear criteria whereby the experiment could be assessed. This evaluation was also done too late, the experiment had to be extended first, and the evaluation was left up to the Member States and badly coordinated. In the Netherlands, the first evaluation report met with strong criticism, and a re-appraisal done at the request of parliament yielded many positive results. I do not have the time to enter into the detail of this, but I think that you are familiar with those reports. I have noted nonetheless that, eventually, you only adopted the negative tenor of those evaluations and have written the experiment off with what amounts to only the prejudices that preceded the experiment. There was wide indignation in the Netherlands about the simple termination of an experiment that had been found to be effective for hairdressers, cobblers, decorators and bicycle repairers – and this in times of recession, no less. After all, you do not need economic models in order to figure out for yourself that the re-introduction of the high rates will cost a very large number of jobs. I am delighted that this indignation is widely shared in this House as well. Moreover, the following logic is applied here: if there are no cross-border or competitively distorting effects, why would the EU prohibit Member States from applying the VAT rates that they think are sound? Why would governments and parliaments not be allowed to weigh up for themselves the goals to collect as many taxes as possible or to promote employment and make moonlighting legal? The Council of Ecofin Ministers has now also clearly and unanimously announced its wish to extend the experiment and to remove the current uncertainty for those involved. In my view, your response in this matter to ignore this request and only to promise to tolerate the illegal continuation of the experiment does not show much respect for European rules and for the way they are implemented in the Member States. 'Tolerance' – surely that can only be intended as a joke on the part of the Commission as Guardian of the Treaty? I should therefore like to urge the Commissioner once again to make a definite, formal proposal to extend the experiment, and to do so before the end of this month, and definitely before 1 January 2004. After all, it is quite clear that there is wide support here in the European Parliament to include the experiment of Annex K in a structural insertion of these labour-intensive services in Annex H of the Directive. It is also clear, though, that this will not be done before 1 January. The sooner the structural facility becomes operational, the better. This will receive our unqualified support and as long as that is not the case, the experiment must remain in force on a formal footing."@en1

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