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I respect my hon. Friend's knowledge of European matters, but I should point out that a Common Market body, the Court of Auditors, has said that the transfer of responsibility for butter dumping was unlawful. That clear statement was put in a report to the Council of Ministers. However, it was never discussed by the Council of Ministers which, therefore, did not come to any conclusion on it. In effect, something that has been condemned as illegal was done without any authority from anybody. My hon. Friend the Member for Skipton and Ripon (Mr. Curry) is shaking his head. I wonder whether he would deny the fact that the Court of Auditors has said that it was unlawful and deny the fact that it was not considered or decided upon by the Council of Ministers. I suggest that he should check that. I think that he might get an unpleasant surprise. If British civil servants had. acted in that way, they would no doubt be behind bars by now.
We see the same loss of sovereignity over the iniquitous. common agricultural policy. When we consider the present debates about the financing of the Health Service and whether £1 billion might be provided to solve its problems, it is sickening to realise that the EEC is currently spending over £11 billion per year solely on dumping, destroying and storing food surpluses, with the Soviet Union and Eastern Europe being the main beneficiaries. That spending is now wholly beyond the control of any democratic body. It has breached wildly the solemn and binding undertakings of the European Council. Our British intervention boards are forced to pay out massive subsidies to enable the Soviets to obtain butter at 6p a pound and beef at 11 p a pound. Our Prime Minister protests, rightly, about that direct subsidy of the Soviet war machine, but it seems there is nothing that the Government or Parliament can do about it.
Previously we considered that we had the ultimate power to use the veto on increases in own resources—a limited fall-back power. However, the devices of the Commission have made that worthless.
The one power that Parliament fought to secure and that is still regarded as the base of sovereignty is the right to determine our own taxes. It is true that in the Single European Act we agreed to work towards harmonisation of indirect taxation in so far as it was necessary to secure the internal market. However, the Prime Minister has pointed out that that section in the Act requires unanimity. In short, we can veto any change we do not like.
During the election the Prime Minister rightly stated that we would resist any plan to levy VAT on essentials such as food, children's clothing and fuel, including gas and electricity. Sadly, the European Court of Justice at this very moment is considering a complaint from the Commission which could force the Chancellor of the Exchequer to impose VAT on gas, electricity, water and sewerage provided to large and small businesses in Britain and to impose VAT on the construction of factories, shops and offices. At our current rate of 15 per cent., that alone would add £350 million to industrial costs apart from what could be raised by VAT on gas, electricity and water.
The Commission has neatly side-stepped the Council of Ministers and the veto in the Single European Act. If we lost that case, which seems almost inevitable after the initial opinion of the Advocate General, our Government and Parliament will, for the first time in their long history, be obliged to levy taxes on the instructions of a non-elected body—the European Court of Justice.