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Chris Bryant (Rhondda) (Lab): I think that the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) must be mistaken. As a neighbour of the Minister, I am certain that he has never issued a press release in his life—unless we include his putting a post-it note on an exhibit in the Turner exhibition describing it as conceptually difficult to understand. If we are going to talk about press releases condemning people, I should point out that the hon. Member for Meirionnydd Nant Conwy frequently issues press releases about me that call me all sorts of things that I would not want to bring up in the House.

It is very good to come to the regular gathering of the anoraks—

Mr. Llwyd: I really do resent that remark. I have been a Member for nearly 15 years and in that time not one Member in any part of the House has had occasion to say what the hon. Gentleman just said.

Mr. Deputy Speaker: Order. It would probably be generally beneficial if we got back into a moderate tone and to the substance of the debate.

Chris Bryant: I am very grateful for your guidance, Mr. Deputy Speaker.

It is nice to welcome everybody this afternoon to our regular meeting of anoraks who express an interest in the European Union. We seem every time to be pretty much an identical set of people, but it was good to welcome the right hon. Member for Richmond, Yorks (Mr. Hague) among us today. It is also good to have my neighbour, my hon. Friend the Member for Pontypridd (Dr. Howells), the Minister for the Middle East, to wind up for us. He is not normally an aficionado of such debates, so I hope that this one has proved enlightening.

I particularly want to congratulate the hon. Member for North Dorset (Mr. Walter) on his speech. He gave the best articulation I have yet heard of why the European Parliament and the EU itself should have an explicit responsibility for European security and defence policy. All his argument led toward that, although I doubt whether that is quite where he intended to take it.

The most important issue that we have to debate as we move toward this weekend of negotiations, which the Government will chair, is the budget. Few Members of the House would want us to start from our current position or, for that matter, from the position of five or 10 years ago. The honest truth is that the EU budget is one of the most complicated and recondite pieces of administration in the world. There are remarkably few people, even in the body politic or, I suspect, even among us here today, who fully understand precisely how either side of the budget—the expenditure and the process of contribution by member states—is arrived at. The ordinary member of the public stands not the barest
 
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chance of understanding the complex arrangement of customs duties, sugar levies, VAT-based contributions and gross national income-based contributions.

The ordinary member of the public does not stand a chance of understanding the way in which the system of contributions has changed, either. The tectonic plates of the way that the EU is financed constantly shift. For example, the element of the entire EU budget that came from VAT-based contributions was 40 per cent. in 2000 and 37 per cent. in 2001, yet this year it will account for only 15 per cent. The whole premise on which the budget is put together is constantly changing and difficult to understand.

Furthermore, as many Members have said today, EU expenditure is not geared toward proper priorities for a 21st century European Union. We have referred many times this afternoon to the €46.5 billion spent in 2004 on the common agricultural policy, and many Members have also referred to the fall in the percentage of the EU's total budget that that represents—from 70 per cent. in the 1970s to a mere 45 per cent. today. Very few would accept, however, that that is enough of a change.

The complexity of the way in which the budget is put together is best explained simply by looking at the Luxembourg proposals that the then presidency put forward earlier this year, and which were of course rejected by the UK and four other member states. The proposals state that

I do not suppose that many in this Chamber, let alone in the wider population, could tell us precisely what that means. The proposals continue:

It is difficult to see how anyone could think that an open, transparent and sensible way of putting together a budget.

Kelvin Hopkins: I must say that, for once, I agree entirely with what my hon. Friend says about the complexity of the budget, but I have suggested many times that if the net contributions to the European budget and the net receipts were in proportion to the level of prosperity in each member state—measured by GDP per head or some other measure—everyone would be happy and we would all understand it.

Chris Bryant: My hon. Friend is an eternal optimist, but arriving at universal happiness around the EU about the budget is going to be slightly more difficult than that. I believe that we should try—certainly by the time we reach the next round of budget talks in 2013—to provide a much more principled budget, based on

which is similar to what my hon. Friend has just said. Such a principle is, however, difficult to apply.
 
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Mr. Walter: I am interested in how the hon. Gentleman is developing his argument, as I believe that the same approach was developed by Baroness Thatcher when she was Prime Minister and was negotiating the Fontainebleau rebate. She argued that, on the basis of our gross domestic product, we were contributing too much to the European Union.

Chris Bryant: The question of how to decide whether a country is or is not a wealthy nation should be fully taken into account. I was about to say that although one might want to assert a simple principle—that the wealthiest contribute the most and the poorest receive the most—it remains complex and difficult to achieve because, as we heard from the hon. Member for Meirionnydd Nant Conwy, countries have both wealth and poverty. One of the oddities of the present structure of the financing system is that it is in the member state's interest to be rich but to have areas of poverty that attract moneys from the EU. That is the best way of ensuring that the net contributions are as low as possible. As I say, that is one of the genuine complexities of the position.

I suspect that we would all accept that member states as presently constituted are, in many regards, a mere quirk of the history of the past five centuries. That explains, for example, why Austria and Hungary are separate and why the Czech Republic is separate from Slovakia and so forth. Aspects of history have, in a sense, produced the member states of Europe today. Within those member states, there may well be significant regions and areas of wealth and of extreme poverty. As the hon. Member for Meirionnydd Nant Conwy would agree, it took a considerable degree of effort to draw up a map that included all the poorer areas of Wales, which is precisely the problem that we constantly face in attempting to build a budget for the EU that is based simply on principle.

The second difficulty is that the relative wealth of member states may change quite dramatically over a period of five to 10 years. The economic success of the UK, Spain and Ireland has meant that the relative contributions and receipts of those three countries have changed quite dramatically. The ability of the UK agricultural industry to reform itself has laid it open to receiving fewer subsidies than other countries.

Mr. Bone: The hon. Gentleman is making a powerful argument and I think that I agree with him, but is it not just plain daft that the net contribution of the UK, per head of population, is more than 50 per cent. higher than that of France? Surely that cannot be right.

Chris Bryant: I agree. Another principle that we should strive towards as far as humanly possible is that the big, prosperous countries, which are in many ways remarkably similar in their financial structure, should contribute broadly the same. It depends on how we choose to cut the cake of wealth. Whether we analyse it in terms of gross domestic product, gross national income per head or ability to buy will affect the conclusions that we reach about which country is the richest. Consequently, we end up with a lengthy debate between the Netherlands and Spain about how to assess each country's wealth precisely. That is one of the complexities.
 
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I am constantly surprised at how discussions between colleagues from France, Spain and Greece feature arguments in favour of the CAP that, translated into English, would be almost the same, word for word, as those put forward by the Countryside Alliance. Moreover, I have always been perplexed to hear Conservative Members argue forcefully in this Chamber on a vast range of topics in a vein similar to that adopted by the Countryside Alliance, and then be the most aggressive opponents of the CAP.

However, the hon. Member for Stone (Mr. Cash) gave the game away this afternoon. What he is really interested in is repatriating agricultural subsidy to member states, because that would mean that each country could go on giving as much money as it wanted to its own farming and agriculture. I am less interested in reforming the CAP than in ensuring that agricultural subsidies across Europe fall substantially. Such a fall would mean that this country was not competing in the agriculture sector on an unfair basis with the poorest countries in the world, and that we did not prevent those countries from earning a decent living.

I believe that those Conservatives who argue most ferociously against the CAP are not really interested in doing away with agricultural subsidy, but that they are interested only in doing away with elements of the EU.


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