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9 pm
Mr. Colin Challen (Morley and Rothwell): It has been a revelation for me tonight to learn that just 12 lines of a Bill could provide such riveting and thought-provoking debate. Listening to the previous two speakers in particular put me in mind of the scenes that filled the Chamber 63 years ago, when a piece of paper was passed along the Front Bench, announcing that Mr. Chamberlain would be invited to Munich to consider another form of treaty. We should compare that with the type of debate that we are having now, which some people may find boring, and which may be obscure and arcane; but the subjects that we are discussing—enlargement and the maintenance of peace in Europe after all these years—are significant and not boring in the least.
There is a danger that people will be alert to the possibility that a Member who contributes to this debate, especially a new Member, is either a Europhobe or a Europhile—because what other kind of person would possibly want to take part in a debate on such an arcane-sounding subject? But I am very pleased to speak from the centre. I want to take a balanced view about the future of the European Union.
It is from the centre that I was earlier forced to ponder on the speech from the Opposition Front Bench by the hon. Member for Hertsmere (Mr. Clappison), which
seemed to suggest that there were no grounds for crediting the present Government with the successful outcome of the Agenda 2000 negotiations. The House was asked to consider who negotiated the United Kingdom's rebate in the first place, and credit was given where credit was due.However, I also want to give credit to Opposition Members who were around at the time for their consistent support, over 18 years of Conservative government, for this country's net contributions to the European Union during that time, which I calculate, from Library figures, amounted to £30.946 billion. Each year under Conservative Governments, the net contribution increased. I find it odd that now the Opposition seem to have such great concern about the net contribution. As hon. Members have pointed out, one cannot have something for nothing; the idea that it is possible is absurd.
I welcome the changes contained in the Bill, as they are a genuine attempt to make the funding of the European Union fairer and, perhaps more important, to be seen to be fair. A move away from VAT-based contributions to a gross national product base will provide a basis for financing the European Union that more accurately reflects the relative wealth of the member states.
The proportion of income that the European Union will take from each of the own resources may become fairer, but that is not the end of the story. We must also ask, how will this money be distributed and spent? I note that the agriculture and sugar levies account for a mere 2.1 per cent. of the own resources, yet agriculture subsidies still take nearly 50 per cent. of the European Union's budget. We need to ask whether the most important financial aspect of the EU's work—efficient agriculture—is, after all these years, still subsidising inefficient agriculture.
I want to highlight regional disparities. I became aware of this problem when I lived in Hull and served on the city council's economic development committee, where I learned about the hot banana. It was a phenomenon 10 years ago in certain parts of Europe, stretching from the south-east of England down to northern Italy, where there was a disproportionate amount of economic development. We have yet to see other regions in Europe catch up with the so-called hot banana.
I have just read a report published recently by Yorkshire Forward, the regional development association, which reviewed Yorkshire and the Humber region's information technology needs. It makes salutary reading, pointing to the lower skills base, the lower take-up of IT in regional businesses and the lower usage of the internet at home and in business. We need to develop our information and communication skills and improve access to European structural funds.
We need a healthy relationship with our European partners to ensure that Yorkshire and Humber businesses in the single market—they are inextricably involved in European markets—are not disadvantaged by a little Englander attitude that opposes all things European and seems to be based on a slogan that is something like, "Part of Europe, but not in it."
Agenda 2000 means that more money will be invested in regional development and that spending on the CAP will be reduced. I believe that EU spending will be brought under control by the Bill, so far as this country is concerned.
Speaking from the centre, I want to be alert to what lies ahead. For example, if European gross national product decreases, what will be the impact on the structural
spending in those regions to which I have referred that are lagging behind? Surely those areas, in those circumstances, might need more structural assistance. I was interested to hear my right hon. Friend the Chief Secretary talking about the investment of £10 billion in regional and structural funds. What guarantees come with that £10 billion?Speaking from the centre, I would like to ask whether the Bill will lead to greater accountability. Will the money that is being spent be easier to draw down? I am familiar with the problems that businesses, voluntary organisations and a wide range of bodies have in accessing European funds. The system seems to be burdened with a great deal of bureaucracy and, very often, bodies in the regions need a great deal of bureaucracy themselves to draw down the funds that are available. Those funds are subject to the vagaries of the exchange rate of sterling and the euro; that may be borne in mind in future debates.
I welcome the Bill, and the fact that it has the vague endorsement of the hon. Member for Rochford and Southend, East (Sir T. Taylor). That is welcome, although he did not seem to put forward any alternative. Indeed, I have heard no alternative suggested by Conservative Front Benchers. Perhaps in the 50 minutes that remain, we will hear their alternative.
9.9 pm
Mr. Howard Flight (Arundel and South Downs): May I welcome the new Economic Secretary, congratulate her on her appointment and comment with some envy on the splendid supply of talented ladies that the Labour party seems to have on the Treasury Bench?
I had to agree with the hon. Member for Bexleyheath and Crayford (Mr. Beard) on at least one thing: his criticism of the rather deliberate obscurity and lack of transparency, in language and documents, that all too often make finding out what is going on in EU matters rather difficult.
Hon. Members have asked whether we have an alternative suggestion. The job of the Opposition is to provide a critique, not necessarily to oppose when the balance of proposals may be reasonable. We welcome European enlargement, and the Berlin agreement, in itself, is arguably not an unreasonable deal. However, it is important to remember that, in an obscure way, this little Bill will effectively give our approval to all last September's Council decisions, including those important proposals contained in paragraph 16 of the EU document, which my right hon. Friend the Member for Wokingham (Mr. Redwood) mentioned. Those provisions would go much further and would empower proposals for EU taxes and further changes to the United Kingdom abatement.
The Government have said that the Berlin changes represent relatively modest, sensible and reasonably fair proposals on EU funding, sensibly reducing the VAT element and increasing the GNP-based element, but they have said absolutely nothing about what they estimate the cost of our giving up the windfalls will be, as and when enlargement occurs.
We all know that Germany, Holland, Austria and Sweden made reasonable requests to reduce their contributions, especially reflecting the fact that the German economy has been somewhat stalled in recent years. However, some people cannot pay less without others paying more, and the net financial deal is that
although our abatement is set in stone—indeed, we have the power of veto over it—we are likely to pay a little more, proportionately, as things advance.The Library notes on the matter openly pointed out—whereas the Treasury notes did not—the need to consider all the items in last September's Council decision, not just the highlights of the Berlin agreement. All those issues are relevant to the Bill.
Before turning to Members' comments, I want to ask the Economic Secretary three specific questions, the first of which is somewhat technical. There is a greater use of GNP figures, but which GNP are we talking about? Are we talking about the official figures; or, as in complying with the Maastricht treaty, are we talking about GNP figures in which an allowance is made for undisclosed economies, which differ fairly significantly among member states? The figures used will make a material difference.
Secondly, what is the position on GNP-based contributions in relation to changing exchange rates? At present, we happen to have a weak euro, but sterling is relatively strong, so will we move up and down with the exchange rate, or will a mechanism exist to provide some stability? Thirdly, will the Government comment on what they expect the windfall cost to be? The figure of £200 million has been quoted, but learned papers have suggested that the figure could be as much as £1 billion in due course.
Mr. Edward Davey: Will the hon. Gentleman give way?
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