VAT is an EU tax, governed by the Sixth VAT Directive. No government can reduce tax rates without the unanimous approval of all 27 member states, acting on a proposal from the EU commission – which it is not obliged to offer. Thus, there is a double-lock. First the commission has to agree to the idea and then the Council must approve it unanimously.So how is it that if the above is true, the glorious one eye'd leader that no one has voted for is able to reduce VAT? Well the above applies specifically to the minimum rate of VAT which - as is set out in Recital 29 of Directive 2006/112/EC (Directive 77/388/EEC Recast) – is currently 15 percent.
No provincial government can reduce VAT levels for the specified goods and services below the minimum rate.So El Gordo is able to say look plebs, never mind that since the Tories upped the rate to 17.5% you have all been ------ up the arse. It is all there fault, never mind that in 11 years of being in power we have seen no reason to give you your own monies back.
However now we have balled up all things fiscal we are cutting taxes, but sorry folks we can't do a real deep cut in taxes as we have signed away all the rights to do so to the nice chaps in Europe. But worry not this news will not be reported on BBC(Pravda) and we shall put ourselves across as the party of "prudence".
The Sunday Times has partly got it right - stating that "under European Union (EU) regulations, Vat cannot be lowered below 15%". - Its a directive but near enough.
Gordon Brown a man who makes me so angry I could punch his light
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