Labour MEPs were today accused of surrendering sovereignty after they backed proposals for Member States to hand tax setting powers to Brussels.

Voting on recommendations from the European Parliament's Panama Papers tax avoidance inquiry, Labour members supported a clause which "calls on the Member States to reach a political agreement on applying a minimum effective tax rate in Europe."

This goes against the policy of successive UK governments which have always regarded national control over tax policy as a key lever with which to control the economy.

Elsewhere the report proposes a common corporate tax base across the EU and the elimination of tax competition amongst Member States.

Conservative MEPs leader Ashley Fox said: "Just days after Labour indicated it may be willing to continue handing huge sums to the EU in return for access to the Single Market, we now have Labour MEPs voting to surrender elements of our tax powers as well.

"It is yet another clear indication that not only is Labour in confusion over Brexit, it cannot be trusted  to run our country."

Conservative MEPs voted in favour of individual tax avoidance measures but abstained on the report as a whole.