A majority of the group called for an end to member states vetoes over VAT as well as more power for the European Commission in enforcing the growth and stability pact.

Changes suggested by the group include 'sufficient approximation of rates, minimum standards and tax bases in the area of indirect tax and company taxation to ensure the proper functioning of the single market,' reported the Financial Times.

Accountancy Age reported last week how the government had decided not to adopt lower VAT rates on offer from an EC experiment for labour-intensive services. The majority of member states did.