Cameron's Coming EU Crisis

The biggest event in Cameron’s first 100 days has been the PM's silence over a proposed European Union move to begin directly taxing the British people.

Today, David Cameron’s coalition government reached its first 100 days in power. FrumForum is marking the day with an online symposium.  We asked our contributors: can anything “new” in Cameron’s conservatism survive this fiscal crisis? Click here to read more responses.

The biggest event in David Cameron’s first 100 days? Something Cameron failed to do. The European Union is asserting a new right to tax British subjects, a constitutional revolution. The new British prime minister has said – nothing.

The Union already gets money directly from Britons through the value-added tax. Since the 1970s, a percentage of British VAT collections has been forwarded to Brussels. Great Britain is the second-largest contributor to the Union’s operations, which total over 100 billion euros annually.

It is the Commission’s deep and longstanding hope to get down to the business of directly taxing the people of member states.  There is scant treaty language to authorize such a move, but that has not and likely will not be a factor in how the Commission proceeds.

Last week, the EU Budget Commissioner, Janusz Lewandowski announced that a broad range of Union-wide taxes on bank transactions, energy, and air travel are being considered.  The Daily Mail reported that he planned on meeting with Chancellor of the Exchequer George Osborne soon to get his support.  This would be in addition to the VAT increase scheduled to hit Great Britain next year.

This prospective arrangement with the Union violates the longstanding constitutional settlement in Britain. When Prime Minister William Pitt stated, 200 years ago that “taxes are a voluntary gift and grant of the Commons alone,” he meant it to pertain solely to the British Crown.   No alternative settlement in Britain has allowed for the Commons to make voluntary gifts on behalf of the people to any other power.  The Union’s new tax plans portend a sea change in the relationship between a Briton and Parliament as great as President Obama’s health care law promises to wreak on that between every American and its federal government. Brussels does not care about Britain’s constitutional niceties; it remains to be seen whether Britons do.

This is Cameron’s dilemma as these taxation proposals progress, as they will:  should he finally put to the British people a Brussels taxation power over them, they will very likely refuse, which will cause a crisis of prestige for Cameron in Brussels and a showdown between Britain and the Union over their continued membership. The only way such a crisis can be deferred is for Cameron to state at once that a referendum will ensue over all Great Britain as to popular assent to any expansion of taxation authority by Brussels over Britons, whether or not that tax is laundered through Parliament to seem more British-born. Each day Cameron is silent makes his constitutional crisis, or worse, Britain’s constitutional abrogation, more likely.  We are now at 100 days.