Britain under pressure to give up EU tax veto

Britain will come under renewed pressure to give up the national veto in some areas of tax and social security policy as talks on EU reform begin their crucial final stages today.

Britain will come under renewed pressure to give up the national veto in some areas of tax and social security policy as talks on EU reform begin their crucial final stages today.

With less than five weeks before a summit to rewrite the EU's governing treaty, senior negotiators from the EU's 15 member states will meet in Paris to discuss the latest proposals from France, which holds the EU presidency.

The document lists 47 areas where the national veto could be scrapped, including two controversial areas already ruled out by Britain - tax and social security. Despite British opposition, France has included majority voting for measures to tackle fraud and tax evasion and for social security provision for people moving between different EU countries.

Tony Blair said yesterday that he would veto the move at next month's summit of European leaders in Nice. Speaking in Newcastle, he said Britain's overall tax rates were lower than any comparable European country. "We will oppose vigorously any attempt to remove the veto on harmonising tax rates across Europe."

Keith Vaz, the Minister for Europe, insisted: "This text is the French Presidency's first draft; the final treaty will be very different."

But Francis Maude, the Tory spokesman on foreign affairs, said: "The Commission's proposals show that the EU superstate agenda is alive and well. Labour must block not only tax harmonisation but also any further loss of the British veto." Diplomats had hoped that some controversial proposals would have been weeded out by this stage. But Britain is not alone in blocking progress in Paris. France itself opposes scrapping the veto in at least one area listed in its latest paper.

The French document also discusses ways to ease the creation of a multi-speed Europe, within which groups of countries may proceed more quickly to closer integration, although consensus is proving difficult here too.

Today is the first time negotiators have seen a formal package of proposals, but diplomats expect few breakthroughs. "I would not expect to see any significant change in the positions of most countries," said one EU diplomat. "The phoney war is ending but we are not yet in a situation where final positions start crystallising."

The slow progress is alarming some diplomats because EU leaders signed up in principle at Biarritz last month to more majority voting and closer co-operation for countries wanting to integrate faster.

The size of the European Commission and re-weighting of votes in the Council of Ministers will not be tackled today. Instead, diplomats will be presented with a "synthesis" of different national positions on majority voting and closer cooperation among countries who want faster integration.

At present, eight member states need to support such a plan, and just one can apply an "emergency brake". At a preparatory meeting, France argued that a different mechanism should be applied to common foreign and security policy. The latest text appears to fudge both issues.