Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-12-03-Speech-3-191"
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"en.20031203.15.3-191"2
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".
Mr President, I should first like to say something about Annex K, on which a number of speakers have voiced their opinion. This Council had established these rules, including those in the directive for evaluation - about Annex K. The Council - and not the Commission - also established that the experiment should run for three years. In fact, it lasted four years, since the Commission wanted more time to analyse the results. I want to stress that the Council stipulated what the rules should be.
As regards CDs, they are by their very nature easily transportable and, therefore, if the rates differ, there is a clear inevitability of a distortion of the internal market. At the moment, no Member State applies the reduced rates to CDs and, therefore, if we did, it would again be a step backward.
That is why I now return to Annex K. I have said to the Council of Ministers that the Commission would not press charges or start infringement proceedings against those Member States that would continue to apply Annex K as if it were still in force - which it will not be. But I recognise that Member States may need a certain time to organise their affairs and that is why I said for the first six months of next year I will not start any infringement proceedings. But Annex K will no longer exist.
The Commission has not made a proposal to continue Annex K. It does so because it is not effective. The reports that the Commission has received from most Member States - including the Netherlands and France, where opinions differ - indicate that there is no noticeable positive effect on employment. The reason is quite simple: in too few cases is the decrease in taxation passed on to the consumer.
In fact, I quote my wife, who said that she had never witnessed a reduction in hairdressers' prices. I do not know whether Mrs Lulling agrees with this, or whether she has witnessed a decrease in hairdressers' prices. My wife has not, and the reason is that the hairdressers pocket the decrease in taxation and, therefore, Annex K amounts to a subsidy for hairdressers.
I have nothing against hairdressers, but why should we subsidise them? It has no positive effect on employment, and if you want to stimulate employment, it is better to reduce the social on-costs of labour for the same amount of money. One will create 52% more employment by reducing the on-costs of labour rather than reducing VAT.
The Commission sees no reason why it should make a proposal, and that is exactly why unanimity in the Council does not work. It only works if there is a proposal, and then it is overturned. In this case, there will be no proposal and, therefore, unanimity in the Council cannot overturn what is not there. The same situation happened previously in the case of the tax-free shops at airports. There was no proposal and, therefore, there was nothing to overturn.
Mrs van den Burg said that I do not respect the rules of the European Union. I should like to know which rule I do not respect. I am scrupulous in respecting all the rules of the European Union. It is the Council which established this entire experiment and set a three-year period. The Commission made it four years. It is the Council, and not the Commission, which said this was in order to increase employment. The whole idea therefore originates from the Council. It is an experiment, and experiments are supposed to be discontinued if they do not work. This is why they are experiments. Therefore, why should the Commission propose an extension of Annex K if it has not worked?
I fail to see, Mrs van den Burg, where this Commissioner is not obeying or following the rules.
On the wider issue of reduced rates, the standard rate is the normal rate. It is around 20% in most countries. That is the standard rate. All derogations must be construed strictly and, where the internal market and distortions of the markets are concerned, one should be extremely strict.
Mrs Randzio-Plath mentioned children's shoes, which are zero-rated in the United Kingdom and Ireland. But if you look at the figures, it is clear that there again there are no noticeable benefits to the consumer. The differences between the prices in the United Kingdom and the prices on the Continent are the same whether the high rate or the low rate is applied. That proves that it is the manufacturer or the trader that is subsidised, but certainly not the end-consumer."@en1
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