London - British Prime Minister David Cameron clashed with French President Francois Hollande over taxes and the European Union budget yon Tuesday.
On his first trip to Downing Street as French President, Hollande denounced Cameron’s plea for French bankers to flee to the UK by boasting that France has a lower top rate of tax.
And he ditched predecessor Nicolas Sarkozy’s pledge to stand with Britain in seeking a real terms freeze to the EU budget.
The talks came as the European Commission demanded an extra £12billion be added to the planned £850 billion EU budget for the period between 2014 and 2020, adding £1.5 billion to the bill for British taxpayers, which was already expected to top £100 billion.
Officials in Brussels said the increase was just a “mechanical exercise” but the Treasury reacted with fury and demanded that the budget rise by no more than inflation. Cameron’s official spokesman said: “We both think the proposal on the table is unacceptable, we both recognise there is a need for restraint.”
But senior sources made clear that Hollande refused to support a deal which Cameron and German Chancellor Angela Merkel struck a year ago to oppose inflation-busting rises in the budget.
Cameron and Hollande held talks and a working lunch lasting 95 minutes - an attempt to make up for Cameron’s backing of Sarkozy and his refusal to see Hollande before his election.
Further tensions were evident at a press conference when the French president was asked about Cameron’s pledge to “roll out the red carpet” for French businessmen over the new leader’s pledge to increase the top rate of income tax to 75 per cent.
Hollande dismissed the furore as “British humour” but then pointedly added: “The top rate in Britain is 45 percent, in France it is 41 percent. That does not induce British people to move to France - except for holiday homes.”
Hollande could also not resist taking a dig at the banking scandal which has engulfed Barclays. He said: “There’s been indeed a few revelations in Britain which means we have to be wary in our respective countries and repressive even in some cases when faced with some behaviours from the banks.”
An unrepentant Cameron made clear he wants to encourage people to move to the UK: “I want Britain to be the most competitive country in the world for people to grow a business, to start a business, to employ people.
“I see it as my job to roll up my sleeves and every day ask ‘what more can I do to make Britain the best place, not just in Europe, but in the world to do business?’.”
Cameron repeated his plan to offer a referendum after renegotiating Britain’s relationship with Brussels. Hollande appeared to back the Prime Minister’s policy, acknowledging that a “two-speed” Europe with the UK in the slow lane is now inevitable.
The French president said: “Britain does not wish to slow down or prevent the eurozone countries from acting. And France, within the eurozone, does not want to drag anyone to join.”
Cameron also welcomed an apparent change of heart on recent suggestions that British residents who own holiday homes in France could be hit with a new wave of taxes.
Hollande ruled this out on Tuesday.
The Prime Minister said: “I have a press secretary who is half French, a chief of staff who has a French wife and an ambassador in Paris who has a home in Normandy. I’m sure he’ll be very relieved.” - Daily Mail