Taxation is Untouchable?

There are some rules which trump all others when it comes to the EU. Whatever the government does or does not sign away some things cannot be protected. Take for example taxation. Tony Blair, with much goading from our hopelessly tax addicted chancellor, makes a big fuss about keeping sovereignty over taxation. Exactly where the red line is drawn, we are not told, but the sentient beings amongst us have already noticed that there are areas where the lines have long since been breached. Last week I brought an obscure case to your attention, this week another case has been plastered over the news.

Many European Union governments will need to reform their corporate tax laws to protect revenues if Marks & Spencer, the UK retailer, wins, as expected, a landmark EU court case which began yesterday.

At issue is whether they can count overseas losses against UK earnings. The Government says no, the men in wigs will probably say yes.

Lawyers for M&S yesterday argued that the differences in tax treatment between domestic and foreign subsidiaries violated EU laws on "freedom of establishment".

The issue is important not because of UK tax revenues, god knows, Mr Brown is drowning us in a sea of taxes. It is important because we can always sack Gordon, but the justices of the European Court of Justice will continue to indulge in judicial activism on our behalf as long as we are members of the club.