Osborne tries to blame the EU for "taxes" - it doesn't charge any

Is the Chancellor hoping the public will forget he's responsible for raising taxes?

Over the next few years, we can expect the Conservatives and the right-wing press to take every opportunity to spread myths about the EU in order to win public support for David Cameron's madcap renegotiation strategy. A useful example of this tactic was offered by George Osborne during his interview with the BBC this morning. The Chancellor remarked that "a lot of big British businesses and small businesses came out last week and said actually one of Britain's problems are the taxes and regulations from Europe". 

There are many things that one can blame on the EU but "taxes" are not one of them, for the simple reason that it doesn't levy any. At no point in the history of European integration have national governments ever surrendered control of taxation to Brussels. As the EU's website helpfully explains:

This [taxation] is decided by your national government, not the EU.

Governments set tax rates on company profits, personal income, savings and capital gains (profits made from selling an asset, such as a house). The EU merely keeps an eye on these decisions to see they are fair to the EU as a whole.

This means ensuring national tax rules are consistent with the EU's goals of job creation and do not impede the free flow of goods, services and capital around the EU, or give businesses in one country an unfair advantage over competitors in another.

Moreover, national governments remain in control of raising taxes as EU law requires that no EU decisions on tax matters be taken unless all member countries are in unanimous agreement.

It's true that the introduction of VAT, which replaced the UK's existing consumption tax, the Purchase Tax, was a pre-condition of the UK joining the EEC in 1973, but since Osborne increased this tax from 17.5 per cent to an all-time high of 20 per cent in his 2010 "emergency Budget", that's presumably not what the Chancellor had in mind. 

With the UK in danger of an unprecedented triple-dip recession, it would be surprising if businesses weren't concerned about the tax burden. But unfortunately for Osborne, the only person to blame for that is him. 

Chancellor George Osborne takes part in a tour of the train wheel manufacturers Lucchini UK, at Trafford Park in Manchester earlier today. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The problems with ending encryption to fight terrorism

Forcing tech firms to create a "backdoor" to access messages would be a gift to cyber-hackers.

The UK has endured its worst terrorist atrocity since 7 July 2005 and the threat level has been raised to "critical" for the first time in a decade. Though election campaigning has been suspended, the debate over potential new powers has already begun.

Today's Sun reports that the Conservatives will seek to force technology companies to hand over encrypted messages to the police and security services. The new Technical Capability Notices were proposed by Amber Rudd following the Westminster terrorist attack and a month-long consultation closed last week. A Tory minister told the Sun: "We will do this as soon as we can after the election, as long as we get back in. The level of threat clearly proves there is no more time to waste now. The social media companies have been laughing in our faces for too long."

Put that way, the plan sounds reasonable (orders would be approved by the home secretary and a senior judge). But there are irrefutable problems. Encryption means tech firms such as WhatsApp and Apple can't simply "hand over" suspect messages - they can't access them at all. The technology is designed precisely so that conversations are genuinely private (unless a suspect's device is obtained or hacked into). Were companies to create an encryption "backdoor", as the government proposes, they would also create new opportunities for criminals and cyberhackers (as in the case of the recent NHS attack).

Ian Levy, the technical director of the National Cyber Security, told the New Statesman's Will Dunn earlier this year: "Nobody in this organisation or our parent organisation will ever ask for a 'back door' in a large-scale encryption system, because it's dumb."

But there is a more profound problem: once created, a technology cannot be uninvented. Should large tech firms end encryption, terrorists will merely turn to other, lesser-known platforms. The only means of barring UK citizens from using the service would be a Chinese-style "great firewall", cutting Britain off from the rest of the internet. In 2015, before entering the cabinet, Brexit Secretary David Davis warned of ending encryption: "Such a move would have had devastating consequences for all financial transactions and online commerce, not to mention the security of all personal data. Its consequences for the City do not bear thinking about."

Labour's manifesto pledged to "provide our security agencies with the resources and the powers they need to protect our country and keep us all safe." But added: "We will also ensure that such powers do not weaken our individual rights or civil liberties". The Liberal Democrats have vowed to "oppose Conservative attempts to undermine encryption."

But with a large Conservative majority inevitable, according to polls, ministers will be confident of winning parliamentary support for the plan. Only a rebellion led by Davis-esque liberals is likely to stop them.

George Eaton is political editor of the New Statesman.

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