The EU is looking to ramp up taxes on tobacco, electronic waste, e-cigarettes and carbon emissions
Even with Brexit, higher ‘sin taxes’ across the Channel means mayhem on UK streets, writes David Campbell Bannerman
The latest depressing news from Brussels is that its unelected President, Ursula von der Leyen, is planning to expand EU ‘sin taxes’ to a truly vast degree – all without any democratic approval by any European state’s electorate. A sharp ramp up in taxes on large companies, electronic waste, tobacco, e-cigarettes and carbon emissions – all are on the table.
We may have Brexited, but this affects us still. No country is an island anymore, as we see every day with the illegal immigrants invading our shores, the level of global crime and with the smugglers of people and much more cashing in on catastrophic European misgovernment and lack of internal borders.
The justification is that this tax grab will pay for the EU’s gigantic €650bn Covid debt. But what does this represent? If the proposed measures pass at the next budget, it will be the first time that we will truly see the executive branch of the EU act as the superstate government that it has always aspired to be.
Why? Because these taxes are controlled centrally by the European Union, they are “own resources”, and it would be the first time that the Commission has sought to increase its budget from the taxes it directly controls. Taxes mean power, Westminster started with the single power of raising taxes for the King, and expanded from there.
This is another reason why we were right to leave the EU. Its continuing centralisation of power to unelected bureaucrats in Brussels, making decisions that cannot be influenced. We were always being outvoted. Not only would these taxes mean an expansion of EU executive control, but they are proof of the wrong-headed policy focus ideas of the Brussels establishment, not the peoples of Europe.
It is highly unlikely that raising the level of sin taxes will also raise the revenues expected.
At every turn, the evidence on tax, especially on so-called ‘sin products’, is that there is a delicate balance that too many governments fail to recognise.
Go too far and revenue will actually fall as markets and consumers turn to an already roaring black market trade. It has been reported that already, even before the mooted tax rises, around €10bn is being lost each year to illicit trading of cigarettes and other similar products. This number will only rise if the Commission presses on.
What happens next should be of even greater concern. The mayhem in Australia should be at the forefront of every policymaker’s mind when they are considering raising taxes on markets and products that already have a booming illegal trade.
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The Australian government raised taxes on cigarettes spectacularly, a move that immediately handed power to organised crime. There was an explosion in violence, centred around the black-market trade in cigarettes.
Firebombing of convenience stores became commonplace as gangs fought for control of the market. A market that was obvious, no longer hidden in shadowy street corners or the depths of the internet. Instead, ‘independent’ shopfronts popped up across the country, much like the empty barbers, phone shops, sweet shops and vape shops that litter too many UK high streets.
In addition to the high risk of violence spilling further onto the streets across Europe, there is an additional element of risk for the UK. And this is not just because of our pre-existing parade of questionable shops or because Starmer’s Labour is likely to meekly copy the EU’s tax rises and then pay the EU for being ‘allowed’ to do so.
The critical point is that organised crime in Europe is firmly behind the illegal trafficking of migrants across the continent and finally onto the so-called ‘taxi boats’ that take them across the Channel.
Strengthening the criminal gangs will turbocharge their efforts to funnel illegal migration to the UK.
This is something that we in Britain should be very concerned about. Despite Starmer’s grandiose statements about cooperation to “smash the gangs”, the reality is very different. Very little progress has been made, numbers are only going up and up, and there is serious trouble on our streets over asylum centres – as in Epping.
So, this is no time for the EU, most likely inadvertently, to find new ways to fund and reinforce those gangs. These sin taxes need a health warning.
David Campbell Bannerman is a former UK MEP and member of the European Parliament trade committee, and chairman of The Freedom Association