Europe Threatens To Tax Childrens Clothes

New Labour has vowed to veto EU proposals to standardise VAT rates throughout all member states, meaning Britain would lose it's zero rating rate.

When Britain joined the EU in 1973, we were granted concessions on books, newspapers and childrens' clothing.

The EU would like to see an end to the zero rating and intend to table proposals at the end of 2008 or soon after.

A Treasury spokesman said, "The UK's zero rates are fully safeguarded under existing agreements. We will not agree to proposals that would undermine the fairness of the UK VAT system."

Time will tell. If childrens clothes jump in price by 17 and half percent, you'll know the Government failed to veto the proposal