They just can't get enough of our money: Fresh EU cash grab 'will force Treasury to raise VAT'
Brussels wants to raise take from VAT income, which could force a 1 per cent rise
Treasury already pays twice as much as France to the EU budget
British consumers face a fresh VAT hike as EU chiefs are planning a tax grab to fund their pet projects.
At the moment 0.3 per cent of VAT in every pound spent goes directly towards EU funding.
But Brussels politicians are planning to raise the levy to 1.3 per cent - and the cost will almost certainly be passed on to consumers if the plans are approved.
Baroness Ashton scrapped a proposal for taxpayers to be informed exactly how much of the contributions went to the EU
The increased tax could be absorbed by the Treasury, although with the Government imposing fierce cuts in spending they would likely be forced to ramp up VAT from 20 to 21 per cent.
The European Commission's seven-year budget proposals from 2014 include controversial moves to step up Brussels' direct revenue-raising powers, through a new EU levy on European banks - a 'Financial Transactions Tax' - and by increasing the EU 'take' from national VAT income.
As the EU budget proposals were being finalised at Commission headquarters last month, Eurocrats suggested that the extra 1 per cent VAT 'take' for Brussels should be itemised separately, to make the public aware of their direct contribution to running the EU.
According to insiders, Britain's EU Commissioner, Baroness Catherine Ashton, raised objections and the idea was dropped.
The proposals are already estimated by the Treasury to amount to a 'completely unrealistic' extra 11 per cent - or £1.4billion a year - on the British net contribution.
The first two years of increased contributions would have to come from the belt-tightening national spending review programme under which Chancellor George Osborne has already allocated drastically-reduced funds.
In Brussels there is still much to be battled over in what is being seen as an inflation-busting spending round at a time of major national cutbacks to fight the economic downturn.
Prime Minister David Cameron warned Commission President Jose Manuel Barroso at talks in Downing Street days before the proposals were unveiled that the public would not understand anything above an EU spending increase in line with inflation - a real-terms freeze.
And after publication, a Downing Street spokesman condemned the plans in a statement reminding Brussels of a letter published last December by Britain, France and Germany, urging that the EU creed 'should not be to spend more, but to spend better'.
The other battleground in the coming months of budget bartering between the Commission, the European Parliament and EU government ministers is the British rebate, which has knocked billions of pounds off the UK's EU bills for more than 25 years.
It currently saves the country more than £3billion a year and, as negotiated by Mrs Thatcher in 1984, is a permanent part of the EU budget system.
The Commission says the rebate is no longer necessary, but UK officials say the justification remains - UK payments to the EU kitty are disproportionately high, with the Treasury paying twice as much to the EU budget as France, and one and a half times as much as Germany.
Now the Commission wants to offer the UK a lump sum to end the current agreement and make any future rebate re-negotiable at each budget review.
The UK would temporarily get even more back than it does now - but face an uphill struggle to get anything back at all in future EU spending review rounds.
As the UK and other member states brace for months of budget wrangling with the Commission and MEPs before final figures are agreed, the Commission vigorously denied that it is planning a massive increase, arguing that the calculations of many national Treasuries use different criteria as the basis for comparing current and future spending.
Commission officials say the projected annual EU budget of £126.5billion amounts to about 1 per cent of the combined GDP of the 27 member states- the same GDP share as the current EU budget.
But national number-crunchers say that means a significant rise, as GDP has been growing in the member states.
They insist that, in cash terms - depending on the base year and whether some EU policies count as "off balance-sheet" as the Commission insists - the budget proposal represents an increase of about 11 per cent, way above inflation.
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