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Authors: Mike Ripley
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without borders, without Customs officers,
without restrictions. If you want to buy a German washing machine, go do it. You want an Italian car or a Spanish video recorder, the choice is yours. But of course this only makes sense if the
goods are taxed the same in all the member states.’
‘Harmonisation,’ I slurred into my beer.
‘Quite right. Harmonising taxes must be the logical outcome of a Single Market, otherwise the thing doesn’t make any sense and there would be little point in being in it. But all the
member countries have their own tax regimes and they guard them very fiercely, so much so that even with twenty years’ warning, they couldn’t agree to do it before the Single Market
came in.
‘On some taxes, though, they at least agreed to move towards a band or range. Value added tax, for instance. There are still different rates of VAT in the different countries, but
they’re all in roughly the same ballpark.’
‘Ah yes, ballparking,’ I murmured. I had heard Amy talking about ‘ballparking’ on wholesale prices of TALtops. I still didn’t have a clue what it meant.
‘And the same stop-gap measure should have applied to excise duties, where the discrepancies are even more pronounced.’ He hit another key and his Powerpoint program hummed and began
to colour in the countries on the map. France, then Italy, then Spain began to turn blue whilst Denmark, Sweden and Ireland were the first to go red. Eventually, the European Union was split red
and blue, the red countries mostly the northern ones: Ireland, the UK, Denmark, Sweden and Finland.
‘The red countries are the high tax ones, blue is low tax and here’s the nub of the problem.’
Murdo typed something on his keyboard and, on the graphic, borderlines began to flash in yellow between Ulster and the Irish Republic, between Germany and Denmark, and Sweden and Finland, and in
the Channel between England and France, and in the Kattegat between Denmark and Sweden.
‘In these places, you have high tax countries next door to low tax ones when it comes to alcohol – especially beer – and, in theory, no border controls or restrictions on how
much you can buy. This isn’t like the duty-free booze you bring back from holiday; this is duty-paid but paid in a country with a very low rate of tax. For example,’ he began to point a
long, thin finger at the screen, ‘beer tax in Denmark was about eight times higher than in Germany at the start of the Single Market, so any sensible Dane would have driven across the border
to buy their beer. Sweden came in, with a much higher beer tax than Denmark, so nipping over to Copenhagen on the ferry to load up the Volvo was the obvious thing to do. Same story with Finland and
Sweden, and, of course, the classic one – us here in Kent only twenty-two miles from France where the beer tax is eight times
lower
with regular ferry crossings and now we’ve
even got a tunnel and high-speed trains.’
‘What about Ireland and the border between the North and the South?’ I asked, very proud that I could think of something to ask. Indeed, I was quite pleased I could still speak.
‘Well, in theory there ought to be a fair bit of cross-border shopping there, but it doesn’t seem to have become as much of a problem as elsewhere. I think it must have something to
do with the Irish attitude to tax. They don’t seem to take it very seriously.’
‘Maybe they have a point,’ I said wisely.
‘Perhaps they do, but down here near the Channel, we have to take things seriously because the problem’s going to get a lot worse before it gets better. Look at this, and remember
what I said about value added tax.’
I nodded enthusiastically but in reality I couldn’t remember which beer I was drinking let alone what he’d said about VAT.
The screen dissolved and reformed into a bar chart with sixteen columns each with the flag of a member state of the Single Market. Some filled the screen, some were
without restrictions. If you want to buy a German washing machine, go do it. You want an Italian car or a Spanish video recorder, the choice is yours. But of course this only makes sense if the
goods are taxed the same in all the member states.’
‘Harmonisation,’ I slurred into my beer.
‘Quite right. Harmonising taxes must be the logical outcome of a Single Market, otherwise the thing doesn’t make any sense and there would be little point in being in it. But all the
member countries have their own tax regimes and they guard them very fiercely, so much so that even with twenty years’ warning, they couldn’t agree to do it before the Single Market
came in.
‘On some taxes, though, they at least agreed to move towards a band or range. Value added tax, for instance. There are still different rates of VAT in the different countries, but
they’re all in roughly the same ballpark.’
‘Ah yes, ballparking,’ I murmured. I had heard Amy talking about ‘ballparking’ on wholesale prices of TALtops. I still didn’t have a clue what it meant.
‘And the same stop-gap measure should have applied to excise duties, where the discrepancies are even more pronounced.’ He hit another key and his Powerpoint program hummed and began
to colour in the countries on the map. France, then Italy, then Spain began to turn blue whilst Denmark, Sweden and Ireland were the first to go red. Eventually, the European Union was split red
and blue, the red countries mostly the northern ones: Ireland, the UK, Denmark, Sweden and Finland.
‘The red countries are the high tax ones, blue is low tax and here’s the nub of the problem.’
Murdo typed something on his keyboard and, on the graphic, borderlines began to flash in yellow between Ulster and the Irish Republic, between Germany and Denmark, and Sweden and Finland, and in
the Channel between England and France, and in the Kattegat between Denmark and Sweden.
‘In these places, you have high tax countries next door to low tax ones when it comes to alcohol – especially beer – and, in theory, no border controls or restrictions on how
much you can buy. This isn’t like the duty-free booze you bring back from holiday; this is duty-paid but paid in a country with a very low rate of tax. For example,’ he began to point a
long, thin finger at the screen, ‘beer tax in Denmark was about eight times higher than in Germany at the start of the Single Market, so any sensible Dane would have driven across the border
to buy their beer. Sweden came in, with a much higher beer tax than Denmark, so nipping over to Copenhagen on the ferry to load up the Volvo was the obvious thing to do. Same story with Finland and
Sweden, and, of course, the classic one – us here in Kent only twenty-two miles from France where the beer tax is eight times
lower
with regular ferry crossings and now we’ve
even got a tunnel and high-speed trains.’
‘What about Ireland and the border between the North and the South?’ I asked, very proud that I could think of something to ask. Indeed, I was quite pleased I could still speak.
‘Well, in theory there ought to be a fair bit of cross-border shopping there, but it doesn’t seem to have become as much of a problem as elsewhere. I think it must have something to
do with the Irish attitude to tax. They don’t seem to take it very seriously.’
‘Maybe they have a point,’ I said wisely.
‘Perhaps they do, but down here near the Channel, we have to take things seriously because the problem’s going to get a lot worse before it gets better. Look at this, and remember
what I said about value added tax.’
I nodded enthusiastically but in reality I couldn’t remember which beer I was drinking let alone what he’d said about VAT.
The screen dissolved and reformed into a bar chart with sixteen columns each with the flag of a member state of the Single Market. Some filled the screen, some were
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