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July 11 2004

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Christopher Booker's notebook
(Filed: 11/07/2004)

North East sees error of Tory nays
Rude shock at V fee
Wake up, scribblers

EU deals a blow to Brown's spending

As Gordon Brown battles to keep Britain's public spending deficit within the limits laid down by Brussels, he faces another body blow. He recently received a letter from the chairmen of the UK's four social housing federations, representing nearly 2,000 housing associations, which provide homes for 3.6 million people. This warned him that, thanks to a 2001 ruling by the European Court of Justice, a significant chunk of the 7 billion spent by housing associations each year will have to be brought into the net as public expenditure, from which until now it has been excluded.

The letter, from the heads of the English, Scottish, Welsh and Northern Ireland housing federations, told Mr Brown that, under the ECJ ruling, they count as "bodies operating under public law". Not only does their spending - most of it privately financed - now have to be included in public expenditure under the requirements of the growth and stability pact, but, as "public bodies", they have to comply with the EC's three "procurement directives".

The first and best known condition of these stipulates that all contracts for works and services above a certain value must be advertised in the EC's Official Journal, theoretically to allow firms from all over the EU to bid for the work. But when the federations looked further into the procurement procedures, they found that these amounted to 350 pages, significantly changing the way housing associations are allowed to operate and landing them in a labyrinth of time-consuming bureaucracy. Richard Clark, the chairman of the English National Housing Federation, said: "Time and money that could have been used to provide better homes and services will instead be spent complying with regulations from Brussels."

Aware of the implications both for the housing associations and for the Treasury, in February 2002, the Government protested to the European Commission. The commission replied that it would take Britain before the ECJ. In face of this threat, the Treasury's Office of Government Commerce has recommended that the Government should back down - which is what has now prompted the alarmed federations' call to Mr Brown to fight on.

The "procurement regime" is one of the greatest, if largely unreported, scandals of the EU. As can be seen from the advertisements in the daily Official Journal, Britain is far more punctilious in obeying these rules than most other countries, just as it is in obeying the rules on "illegal state aid".

When, on Radio 4's Today programme last week, Derek Simpson, the leader of the trade union Amicus, called for more of the 109 billion we spend on public procurement to be diverted to British firms, to boost manufacturing jobs, neither the interviewer, James Naughtie, nor the minister Patricia Hewitt, pointed out that this would be prohibited under the procurement rules.

Mr Simpson asked why Britain was about to lose its last train-building capacity when every train in France or Germany is built in those countries. Neither Mr Naughtie nor Mrs Hewitt explained that this was because both those countries were in flagrant breach of the procurement and state-aid rules, which is why our steel, shipbuilding and coal industries have found it so difficult to compete with their state-subsidised Continental rivals.

It is one thing to see these disasters unfolding. What is worse is the reluctance of our politicians and media to recognise why this is so.

North East sees error of Tory nays

Barely noticed by the media, the greatest reform in Britain's local government in centuries took another step forward on Thursday, when John Prescott ordered referendums to be held in November on whether three of England's nine "Euro-regions" should have their own elected regional governments.

No one has done more to expose the farcical chicanery behind "Prescott's Folly" than Neil Herron, the leader of the grass-roots "No" campaign in the North-East. But just when, thanks to his efforts, the region's "Yes" campaigners seem in total disarray, they have been given a flicker of hope by the curious intervention of a rival "No" campaign, masterminded from London by the Conservative Party.

Bidding for the 100,000 on offer to the official campaigns for each side from the Electoral Commission, the new Tory organisation claims to be "cross-party". It has, however, decided that it has no place for Mr Herron, viewing him as a "maverick" who might alienate big business and local Tories.

Surprisingly, no one last week expressed more alarm at this development than the "Yes" campaign, which has long recognised Mr Herron's efforts as its established opposite number. This is because if two rival "No" campaigns emerge, there can be no public money for either of them, or for their "Yes" opponents. If the two "No" groups in the region do not get together fast, this tale could sink even further into farce.

Rude shock at V fee

Ray Ellam is one of thousands of UK citizens with a holiday home in Cyprus who took advantage of a government scheme that allowed them to buy or import a car to the island tax-free, so long as they were not resident more than half the time. As proof of this, each time they left the island they took their "V-plated" vehicle to a bonded warehouse, whence, on their return, they could reclaim it for a small fee.

When Mr Ellam went to claim his 8,000 car this year, however, he had a rude shock. He was told that, now that Cyprus was in the European Union, he would have to pay excise duty, Vat and registration fees, amounting to nearly 8,000, the total value of the car. The calculations were scribbled out on a scrap of paper by Customs officials, who insisted that they had not known about the new rules until May 1.

The Cypriot press reveals that hundreds of other V-plate holders have been caught in the same trap. The Cypriot government claims that car owners had been given warning, but this has been strongly denied by the victims, who say that neither customs nor the transport ministry gave them any hint of the new rules.

Back in England, Mr Ellam wrote to Mark Watts, his Labour MEP. When his letter was ignored, he then wrote to the recently-elected UKIP MEPs, Nigel Farage and Ashley Mote. Since they could see no obvious way in which Cyprus can be called to account for such a shameless breach of the "spirit of the Community", they passed Mr Ellam's case on to me.

Wake up, scribblers

Simon Jenkins, in an article in The Times on smacking, wrote last week that "Britain allegedly invents roughly 10 new crimes a year". What planet, I have to ask, is Sir Simon living on? He clearly hasn't woken up to the unending blizzard of new laws pouring out of Whitehall and Brussels each year creating not "tens" of new crimes a year but tens of thousands. If Sir Simon were, for instance, to look up the Animal By-Products Regulations 2003, implementing EC Regulation 1774/2002, he would find that this one piece of legislation puts more than 500 new criminal offences on the statute book, each punishable by a fine up to 20,000 or up to two years in prison. It is far from untypical.

If more media folk, led by Sir Simon, could actually look at some of these laws we might have rather better-informed outrage at the revolution in government that they represent, instead of the lofty observation that "Britain allegedly invents roughly 10 new crimes a year".