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Mr. Deputy Speaker (Sir Michael Lord): Order. We are straying rather wide of the matter before the House, and I would be grateful if the hon. Gentleman returned to it.
Mr. Bercow: I am very happy to be guided by your strictures, Mr. Deputy Speaker, and I will focus my remarks accordingly. I will not argue the toss about whether or not there were 88 measures; we can always argue subsequently about exactly how many measures there were. That is a matter for legitimate debate.
In the interests of having a proper debate about autonomous revenue-raising powers, which is directly relevant to the Bill, I strongly advise the Economic Secretary and Paymaster General to get hold of copies of an excellent document published by the Centre for Policy
Studies, the author of which is the colleague to whom I referred a few moments ago, Theresa Villiers MEP. The document is entitled, "European Tax Harmonisation: The Impending Threat". It makes absolutely fascinating reading. I read it late last night and studied it very carefully, and I can tell the Paymaster General that it certainly is not a cure for insomnia. It is a thoroughly good document and it tells us the track record of this matter.The significance of what the Paymaster General said is that the work of the working party would "never be finalised". I presume that the hon. Lady will not deny that she said that on 10 October 2000 to the European Parliament's economic and monetary affairs committee. The Government have trumpeted as an outstanding achievement what is really a very modest deal secured as a result of the Berlin summit. It is not a great accomplishment. The hon. Member for South Derbyshire, who is a legendarily independently minded representative in the House, put his finger on it when he said that it was modest.
If the Economic Secretary would simply say that the Government think that they have reached a worthwhile, but modest, achievement, and that the Opposition should acknowledge the progress that has been made, I would take my hat off to her, but I confess that I am not holding my breath in anticipation that she will suddenly abandon the term "triumph", which she has twice used to describe the measure.
The Government did not achieve very much. There is a widespread and understandable anxiety on the part of a great many of our fellow citizens that there could be in train new revenue-raising and decision-making powers of the European Union. If those new powers flow from the decision and the passage of the Bill, it will be to the eternal discredit of the Economic Secretary. She has indicated that that will not happen. Many of us fear that it will. Those concerns are genuine; they are frequently expressed, and they should as a matter of course be listened to respectfully and heeded in practice.
What we need from the Government, throughout public policy but no more so than in European policy, is frankness and candour. Over the past four years we have had neither. My right hon. and hon. Friends and I are determined to ensure that over the next four years we get a greater measure of both.
2.35 pm
Mr. Edward Davey (Kingston and Surbiton): I enjoyed the speech of the hon. Member for Buckingham (Mr. Bercow), and I welcome him to his new duties. I look forward to sparring with him and with the Economic Secretary and other Treasury Ministers in due course.
Over more than half an hour, the hon. Gentleman seemed to make three substantive points. The first, which took 10 minutes, was that the word "triumph", which was used by the Economic Secretary on Second Reading to describe the Bill and the negotiations that preceded it, was wrong. The hon. Gentleman would describe the Bill as modest. I agree with him, as I said on Second Reading:
- "It is a modest measure that arises from the modest decisions taken at the Berlin summit. Indeed, its modesty explains why it is disappointing."
- "We must be far bolder in reforming the CAP."—[Official Report, 3 July 2001; Vol. 371, c. 157-160.]
The hon. Gentleman's third major point was about tax harmonisation. I do not share his concerns. I agree that tax harmonisation would be wrong, but I disagree that it is at all likely. Indeed, he seemed unable to substantiate his allegation that the Government would be unable to veto any such proposal. Not only is he wrong, but the major point that he made does not relate to the Bill.
Mr. Bercow: The hon. Gentleman and I may just have to agree to differ. I am sorry that he thinks that I do not have a justification for my point. I maintain that I do, both on the basis of historical precedent in relation to the identification of examples of unfair tax competition and in relation to the text of the decision. Can the hon. Gentleman, who obviously disagrees with my interpretation, tell me what he understands by the term "autonomous revenue-raising powers", which are newly to be sought?
Mr. Davey: By focusing on that textual point, the hon. Gentleman misses the point, which is that a veto is retained by each member state. The Liberal Democrats support that veto, as do the Government and, I assume, Conservative Front Benchers. That means that the problems that he spent 10 minutes outlining do not exist.
I am surprised that we are here, because a Programming Committee met on 18 July. I was present and so was the hon. Member for Mid-Worcestershire (Mr. Luff), the Conservative Whip. We argued that this day's debate was not necessary, but the Government persisted in vehemently arguing that it was necessary. In the end, there was a vote in the Committee. In preparing for the debate, I thought that the Conservative spokesman would keep his or her comments short. Perhaps that was wishful thinking. [Interruption.] The Conservative Whip says that by the standards of the hon. Member for Buckingham he did deliver a short speech. Perhaps he is right. Let us warn right hon. and hon. Members who are not present of that.
The Conservatives and Liberal Democrats agreed in the Programming Committee that we did not need an extra day, primarily because all the issues had been debated on Second Reading and would be covered in Committee and on Report. We decided that we could move swiftly on. Indeed, the Conservatives did not vote against the Government. I listened to the speeches by the Conservative spokesman and thought that the Bill—as opposed to some of the points raised by the hon. Member
for Buckingham, which went beyond its remit—was relatively uncontroversial. Perhaps the Conservative Front Bench has changed its position with its change of leader.
Mr. Bercow: I am taken aback by the hon. Gentleman. He is spending some minutes lamenting the length of the Third Reading debate on a critical matter that relates to a net UK contribution to the European Communities of about £4 billion a year. What is his problem? Is he so anxious to debate the ministerial salaries order that he wants to end this important debate, or is he missing a preprandial drink in Kingston and Surbiton?
Mr. Deputy Speaker: Order. Both hon. Gentlemen are making points about how we have arrived at this stage. Perhaps we can now get on with Third Reading.
Mr. Davey: I am more than delighted to do so.
The Minister set out the general background to the debate on Second Reading and earlier. The nature of the debate is that the own resources decision has been reformed, and the Bill implements that change in UK law. I welcomed many of those reforms on Second Reading, as did Conservative Front Benchers, especially the switch from the value added tax aspect of own resources to gross national product, which is a much fairer system, the ceiling of 1.27 per cent. of GNP on the EU budget and the proper discipline that has been placed on EU finance. The Government should be congratulated on gaining those substantive reforms, although they are relatively modest.
On Second Reading, I said that the Bill's major problem is its modesty. We need far more radical solutions to reform the EU budget. The Bill does not even begin to nod in the direction of those radical reforms. EU finances have rightly been criticised for many years by hon. Members on both sides of the House. Perhaps we should also take a closer look at the way in which we manage our domestic budgets, which often leaves a lot to be desired.
Recent reforms of EU finances include putting the 2001 budget under policy headings for the first time. Right hon. and hon. Members may think that that is a minor reform, but the fact that we have had to wait until 2001 to gain such a modest change goes to show what a state the EU budget is in. The Bill fails because there is so much more to do. Why are we not setting budgets based on outcomes, outputs and activity-based management at an EU level? That would be sensible. Why are we not rationalising the whole EU budget? That would result in cuts, which I am sure would delight the hon. Member for Buckingham.
There are too many budget lines scattered around the EU budget, too many small proposals for expenditure and too many small pots of money—the EU slush funds. They are unnecessary and do not amount to a row of beans in terms of what they produce. We and our European representatives should be arguing to strike out such pork-barrel politics. We need to focus the EU on its core competencies, which will make the budget more transparent. We need to examine key areas of EU spending. CAP reform has been discussed, and I agree with the hon. Gentleman on that.
We also need to consider the budget for external aid. Chris Patten brought that to light and proposed many interesting reforms of the way in which the EU should
allocate substantial sums that have been earmarked for it, but that money is often wasted. It is not spent in the right way and it certainly does not meet the objectives of the initiators of the budget lines. We need to implement a major reform of the way in which we allocate such a serious amount of money.The Bill and the discussions that preceded it did nothing to tackle major reforms. Despite the rhetoric of Eurosceptics, there are not many officials in Brussels. The Commission does not have an army of civil servants. As the EU budget is not focused on its core competencies, officials run around trying to administer small pots of money that have no effect. Their time is wasted by dealing with detailed application forms and monitoring and auditing the money. If we focused the budget, we could get better value for money from civil servants in Brussels.
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