Prosperity
- Joining the single currency would mean handing over the power to set our own taxes. This is untrue. Britain's tax levels and the issue of membership of the single currency are completely separate and totally unrelated. Moreover, Britain retains a veto on tax issues in the Council of Ministers.
- Britain's membership of the EU risks jeopardising our low tax economy. This is untrue. David Smith, Sunday Times Economics Editor has said: "I never thought I would write this but does Gordon Brown have something to learn from Germany on tax reform? The tax-reform proposals, approved by the German cabinet, include a basic-rate income-tax cut from 22.9% to 15% by 2005, a top rate cut from 51% to 45% over the same period and a cut in the main corporation-tax rate to 25% next year."
- Membership of the single currency makes EU countries liable for each other's pension liabilities. This is untrue. Article 103 of the Amsterdam Treaty specifically ruled that EU member countries would not be liable for each other's pension liabilities: "A member state shall not be liable for or assume the commitments of central governments, regional, local or other public authorities of another Member State."
- Britain is cheaper for shopping than other EU countries: we are better off with the pound. This is untrue. The most recent survey by consumer magazine 'Which?' said: "It's clear that, for many types of goods, the UK is an expensive place to shop. Our price survey shows big differences between the UK and other EU countries."
- Shoppers in countries joining the single currency have found that prices have gone up. This is untrue. The creation of the eurozone is already acting to reduce prices within it. 74% of companies with variable prices across Europe think that the gap will narrow further between their lowest and highest price, with 39% thinking that the average price will fall, according to KPMG. 40% of firms have already cut prices over the last year because of the single currency.
- Britain is better off than the euro-zone countries. This is untrue. On GDP per capita, the universally accepted measure of wealth, Britain is only the twelfth richest country in Europe (OECD, $ ppp basis).
- Most of the EU ranks behind the UK and the USA on the United Nations global human poverty index. This is untrue. The opposite is in fact the case. The UK ranks behind most of Europe on the United Nations global human poverty index and the USA is even lower.
- We would be better off outside the EU because the UK is a net contributor to the EU budget. This is untrue. We would be worse off out of Europe. An independent report published by the National Institute for Economic and Social Research in February 2000 showed that the British economy would contract (and taxes would rise) if we left the EU, despite the fact that the UK is a slight net contributor to the EU budget. David Mackie, Chief European Economist at JP Morgan has said: "In the great scheme of things, our net contributions are so small as to be trivial. There is no doubt in my mind that the net benefit of membership of the EU is many orders of magnitude above our net contribution to the EU budget."
- We would be better off out of Europe because we have a trade deficit with the EU. This is untrue. Our trade deficit with the rest of the world is far greater than any with the EU. Indeed, Britain's current account position with the European Union was in surplus both in 1998 and 1999. Our present trade deficit is partly due to the strength of the pound, and would be expected to fall as and when sterling floats down to its long-term level. Alison Cottrell, Chief International Economist at PaineWebber International has said: "Withdrawal from the EU could make access to European markets for British exports harder, which would be to the detriment of our balance of trade."
- The Bank of England was forced recently to sell its gold by Brussels. This is untrue. The decision to sell gold was taken by HM Treasury and indicates that government economists expect Britain to have low inflation for the foreseeable future. This is good news. Holding gold does not generate an income stream - the interest rate on gold is zero.
- The prices of food and children's clothes will soar if "Brussels" succeeds in "bulldozing" through a plan to slap VAT on them. "Brussels" cannot "bulldoze" EU taxation policy. Britain can veto any such proposals we oppose.
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