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Your Update from Catherine 21

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Dear Reader,

This last week has certainly been an interesting one. While I cannot promise to have watched the Queen's Speech avidly (I was held up in Geneva Airport for 24 hours on Wednesday - occupational hazard) the contents of it were not surprising.

While it shows the potential for just how far the Tories will go when governing alone it also shows how fragile they are. The much hyped British Bill of Rights failed to make an appearance as a number of Tories disagreed with plans to pull out of the European Convention of Human Rights. The Tories are increasingly losing their unity and becoming more divided and I see this happening with increasingly regularity.

Protecting the Human Rights Act (at least for now) is a victory for us all. Britain and its citizens can collectively breathe a sigh of relief. But we can be sure that this isn't the end of the matter, and Liberal Democrats will have to continue to fight to protect our human rights and civil liberties.

It was of course no surprise that the EU referendum featured - we've all been waiting for it and, while I believe that going through this process will create uncertainty and put many businesses' plans on ice I am pleased we can now forge ahead with the campaign.

But, in order to win the campaign we need the winning arguments. I'm thinking about how I can help with the campaign and make sure we all know as much about the EU and why it benefits us as possible. The first step is to introduce a new 'Did you know?' section at the bottom of this newsletter which I'm hoping will be a regular feature. 


EU backs down on research cuts

I'm delighted that cuts to the Horizon 2020 research budget have been slashed by £360 million but keen to ensure other diverted funds only lead to increased investment in research.

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I've written to you in recent months about threats made by the new Commission to the EU research budget.

After discussions between the Commission, the European Parliament and Council went on long into the night on Wednesday this week  it now seems clear that the new plans are not as bad as we'd feared.

It was agreed that £1.6 billion would be taken from the EU's research budget in order to fund Commission President Juncker's Strategic Investment Fund - that's around £360 million less than originally proposed.

There's also further good news as funding for the European Research Council and Marie Curie Programme will be ring-fenced.

I tabled a written question to the Commission about this back in February of this year and demanded that any funding taken from the budget must still be spent on research under the Investment Plan.

Scientists from across Europe, including a group of 27 Nobel Prize winners, were also extremely concerned and wrote a letter to President Juncker warning about the impact the cuts could have on innovation and science in Europe.

It's clear that these reductions to the cuts are a victory for the scientists, the European Parliament and all those who campaigned across Europe to protect the research funding and will mean that many vital research projects will still be able to progress.

But questions remain over the impact the remaining cuts will have. The Commission must explain how it will ensure that these cuts do not undermine the EU's competitiveness and long-term economic future. 

I'll be keeping an eye on where the money is being spent and lobbying the Commission to ensure that each and every penny redirected from Horizon 2020 will end up delivering the same or greater amount of investment in research.


Preparations begin for the YES campaign

I've been meeting pressure groups, businesses and fellow MEPs to get the ball rolling.

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One thing the election result made absolutely clear was that we now face a referendum and if there's one thing recent elections have taught me it's that we can't possibly ever tell the outcome of the way the public vote!

I'm now incredibly worried about the future of the UK and our relationship with the EU. We cannot underestimate the strength of Eurosceptic feeling in the UK and the role the national media will play in misinforming the public and strengthening this opinion.

However, good news: we will be able to campaign for YES! If there's one thing that can be learnt from the Scottish independence referendum it is that campaigning for 'No' is incredibly hard - especially as the campaign must be a positive one.

I've already met with a number of key groups in London including Business for New Europe and British Influence to discuss how the campaign will be run, what the key messaging will be and who will be leading it. 

I was pleased to learn a new 'YES to Europe' group will be established, rather than one of the standing groups leading. Details of this are still being kept very much under wraps but I'll keep you updated as and when I know more.

I've launched a campaign on my Website to Keep our Seat at the Top Table - it would be wonderful if you could promote and share this on your own social media sites and sign yourselves. I'm aiming to keep signatories as updated as possible with news from the campaign.

If you have any questions on how I can help or suggestions for what you'd like included in the new section please do get in touch.


More good news for small businesses

I've been working with local campaign group EU VAT Action to raise the issue of new VAT rules which have been strangling many small online traders out of business.

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The Commission launched its new Digital Agenda this month which outlines plans for the completion of the Digital Single Market and also puts forward ideas of how to reform the VAT rules for smaller businesses.

One of the major changes will be a common EU-wide minimum VAT threshold to help smaller e-commerce businesses as well as implementing an electronic payment and registration system to reduce costs and administrative burden and extending this to tangible goods.

These two measures will effectively protect the smallest businesses and, instead of having to declare and pay VAT to each individual Member State where their customers are based, businesses would be able to make a single declaration and payment in their own Member State. But there is always a long period between policy announcements and implementation, so I still remain very concerned about the situation of the smallest businesses trading online, a sector the UK leads in.

So, in a Parliamentary debate in Strasbourg last week I gave a written contribution calling for an immediate suspension of the rules for the smallest firms while a more permanent solution is found.

None of the changes mentioned will be implemented until 2016 and action must be taken right away to protect many of the remaining online traders from collapsing.


Euromyth Buster

EU tax rules too taxing for UK press.

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Claims that the EU are planning to impose a minimum rate of taxation across the EU common to all businesses are just plain wrong.

The Daily Telegraph and Daily Express claim that a common EU corporation tax is coming our way, after a 'secret French and German plot' has been revealed.

What the EU IS looking into is that when profits are generated from cross-border trade they are effectively and fairly taxed. 

Discussions are about tax bases to make sure companies cannot unfairly escape payment or derive unfair advantages from moving profits around, not about tax rates - a tax base is the value of the income on which the tax is levied and has nothing to do with the rate.

Of course, what's more is that the member countries all have a veto in the area of taxation so our government would have to agree any changes first anyway.

Find more information on what the EU proposes to do here.



Did you know?

As mentioned I'm introducing a new section to the newsletter - in order to win the argument we must have all the facts at our fingertips - many may seem simple but with an estimated 50% of the population admitting to having little or no knowledge of the EU I want to leave nothing to chance. 

For this month I thought I'd begin with a diagram of how the EU functions - joint legislative power between the Parliament and the Council with the Commission proposing and implementing legislation:

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Any suggestions of what you'd like to see here next would be most welcome.

Best wishes,

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