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Last week the Chancellor announced in his Pre-Budget Report that the Government would not repay tax “incorrectly” levied from more than six years ago.

Unfortunately this is a direct challenge to an earlier ruling by the ECJ, which laid down that such repayments should stretch back to 1973. The same court has made judgments in the past which have forced the Treasury to change tax law and to return tax paid by British businesses. This is not a academic debate that has nothing to do with us, if Gordon Brown is forced to return to big international companies the tax levied legally by the British government on their operations, then we have to pick up the shortfall, and this means either our taxes go up or our services are put under financial pressure.

Neither are we talking about piddling amounts; this coming week for instance the ECJ is likely to rule on a case which could cost us all several billion pounds.

Under British tax laws dividends paid between UK companies within the same group escape tax. However, if a dividend is paid by a company based outside the UK to a British firm in the same group, tax must be paid. A group of companies are challenging the British government’s right to levy these taxes under EU law, and if as expected they are successful the verdict would force the Government to pay back at least £6.7bn in tax plus interest to the companies. The Chancellor’s decision to limit the time they could claim these repayment to six years, would then be challenged, as the ECJ has already said in previous cases that their ruling can be back dated to when we joined the European project there seems very little chance that we could avoid the payments.

I know the political elite would like us all to stop talking and thinking about the affects the EU is having on our government’s powers, but it seems a bit inane of them to actually ignore it themselves. When Brown made his announcement lat week he must have known that it contravened the ECJ ruling, so what is his bottom line -is he prepared to challenge the ECJ supremacy in this matter - if he is not then his will be faced with making a humiliating climb down, I don’t suppose he will be making an announcement to that effect though.

I had only read the headlines of this case and thinking it was a possibly an EU myth gave it no further thought, but what Booker has disclosed in his column this week is a travesty of justice. The EU Commision has against all the evidence connived to force the British Food Standards agency to close down a British company, it and the ECJ says was doing nothing wrong.

Bowland Dairies in Nelson was an £8-million-a-year business making curd cheese, mostly exported to five EU countries, including France and Germany

On June 12, inspectors of the European Commission’s Food and Veterinary Office (FVO), issued a “rapid alert notice” that its products were unsafe. The milk in the cheese, they claimed, broke EU rules on antibiotic residues.

On June 20, after thoroughly inspecting the plant, Britain’s Food Standards Agency (FSA) strongly disagreed. It recommended one or two minor changes in procedure, and allowed production to resume.

On July 4 the commission repeated its claim that the milk did not comply with EU rules. The FSA responded that the FVO inspectors seemed to be confused over the type of milk the firm used. Telling the European Standing Committee on the Food Chain that “no evidence was found that contaminated milk was used”, the FSA issued a notice to all EU member states that Bowland’s cheese was entirely safe and fit for market. The commission appended its own negative comments to this notice, effectively maintaining the ban.

Bowland took the commission before the ECJ and, on September 8, Judge Bo Vesterdorf, president of the Court of First Instance, having reviewed the case legally and scientifically, found unreservedly in the company’s favour.

The commission was ordered to withdraw its notice and its comments about the firm. Twice it refused. On September 12 Vesterdorf ordered it to “stand aside”. The commission tried to add a statement to the court order, claiming that it had lost on a mere technicality. The judge ordered this to be removed.

On September 27 the FVO returned to Bowland, this time for an exhaustive two-day inspection, but could find little wrong. (Any findings, the commission’s chief inspector told Mr Wright, would be “non-emergency”.)

However, on October 4, the commission asked its standing committee to approve a commission decision banning Bowland from further trading. The 25 members present were not shown the court’s judgment or any technical evidence, other than a defence of the new procedure for testing antibiotic residues – from the firm which had devised it. Twenty two countries voted for a total ban, with Britain abstaining.

The commission announced that it would seek to have the UK food safety authorities fined for failing to protect consumers against contaminated milk (despite the court ruling and the lack of any evidence of contamination).

Despite the FSA’s solid support of Bowland and its insistence that no rules had been broken, the Department of Health bowed to the commission’s diktat. On October 16 it rushed through a statutory instrument, the Curd Cheese (Restriction on Placing on the Market) Regulations 2006, to take immediate effect. Section 3 read “No person shall place on the market any curd cheese manufactured by Bowland Dairy Products Limited”.

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