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Mr. Hoon: I am reflecting on some of the hon. Gentlemans rather exaggerated figures for the UKs net contributions. In the period up to 1997, in the days when I debated at length with the hon. Member for Stone (Mr. Cash), I was well aware of the arguments he used to put to the then Government Treasury Bench. Presumably if the hon. Gentleman is consistent, he will argue that the situation that we inherited was catastrophic and that since 1997 there has been a huge improvement in the relative contributions made by the UK, especially in relation to other member states. If the hon. Member for Altrincham and Sale, West (Mr. Brady) is still critical of that imbalance, he will be extraordinarily critical of the one person who unites most Opposition Membersthe Baroness Thatcher.
No wonder the Chancellor was furious; no wonder he thinks he would have done a better jobit would be hard to have achieved a worse deal for Britain and British taxpayers. The total budget is rising, the cost of the CAP is rising, the rebate is being cut and Britains net contribution is doubling.
Mr. Cash: Is not it the case, as significant media coverage suggested at the time, that the Chancellorwas actually not consulted about the final deal? Furthermore, he will be handed a poisoned chalice, if of course he ever manages to get hold of it.
Mr. Brady: Perhaps the Financial Secretary will shed light on that point when he replies to the debate, because he has been much closer to such matters. There has been considerable speculation that the Chancellor was kept in the dark throughout the process of agreeing the budget, even though he will have the task of trying to find the funds if the Prime Minister remains in office. Of course, if the Chancellor were to become Prime Minister, he would face a significant challenge.
John Bercow: May I put it to my hon. Friend that the concerns expressed a moment ago by our hon. Friend the Member for Stone (Mr. Cash) are reinforced by the fact that although the new Economic Secretarythe Chancellors representative on earth, the hon. Member for Normanton (Ed Balls)was in the Chamber for the start of the debate, he did not stay for very long?
Mr. Brady: My hon. Friend raises an important issue. It is also interesting to students of Kremlinology that the Chancellors other representative on earth was the previous Minister for Europe, but I am not sure what the significance of all those movements is. Thankfully, that is a matter for others.
Everything I have described was clear in December, when it looked as though the Prime Minister had managed to reach the worst possible deal for Britain, but the picture has grown steadily worse since, with British Ministers giving away their strongest cards,
apparently powerless to stop a further collapse in our negotiating position. In February, the then Minister for Europe submitted an explanatory memorandum that set out the Governments approach to the negotiation of the inter-institutional agreement, stating their priority that the agreement
fully reflects the deal reached in December
the Government will strongly oppose any proposals during the negotiation of an agreement to increase the overall expenditure ceiling...given the delicate nature of the compromise reached in December, the Government does not see the scope for re-allocation of spending between different expenditure headings.
However, despite the Governments supposedly strong opposition, the European Parliament was able to push through a further £2.68 billion increase in the budget last month and, as has already been mentioned, the Budget Commissioner has suggested that the picture is actually worse than had previously been acknowledged due to the fact that a further £24 billion in various financial instruments is being accounted for outside the EU budget total.
To make matters worse, the British Treasury has changed the way in which it presents payments to the EU, making it impossible to make direct comparisons between past and future years. Given that The Sunday Times reported a source saying of the EU Budget deal that
The Treasury is quietly fuming...we have ended up giving away much more than we expected and with precious little to show for it in return ,
Mr. Philip Dunne (Ludlow) (Con): I am intrigued to hear the words of the current Ministers predecessor, which my hon. Friend has just revealed to the House. Can my hon. Friend reconcile that statement with what we have heard from the new Ministeror rather, the retread Ministerwho described the settlement as disciplined, fit for purpose and truly accountable? Can my hon. Friend explain that?
The escalation of EU budgets and the continuing expansion of the CAP are an even greater cause for concern, because, as my hon. Friend the Member for Buckingham (John Bercow) has pointed out, we are approaching the shameful 12th year for which the EU Court of Auditors has been unable to sign off the European Unions accounts as reliable and free of fraudagain a massive opportunity missed by the British presidency when this country could have insisted on proper financial controls before a new budget, let alone a bigger budget, was agreed. Instead of the root and branch reform of accounting practices that is needed, the IIA simply assures us that
the Budget will be implemented in a context of sound financial management based on the principles of economy, efficiency, effectiveness, proportionality of administrative costs
There is no recognition of the scale of concernabout the EUs existing budget. There is no apparent
understanding of the profound lack of confidence that people feel as to whether their money is being used as it should be. In the European Parliament a year ago, the Prime Minister struck a visionary note. He said:
In my time as Prime Minister, I have found that the hard part is not taking the decision, it is spotting when it has to be taken.
It is understanding the difference between the challenges that have to be managed and those that have to be confronted and overcome. This is such a moment of decision for Europe.
The Prime Minister was right: the British presidency was a remarkable opportunity to confront the things that are wrong with the EUthe growing budget, the common agricultural policy, the lack of adequate financial controlsbut all those chances were missed, leaving no one very impressed. The German press said that the Prime Minister had
started the British Presidency as a tiger and finished as a doormat.
resolve the crisis of leadership and one of them comes out on top.
Even out and out pro-Europeans like me could not accept a one-sided deal that only moves on the rebate. That would be very difficult to get through.
The British people want a European Union that does less and costs them less; they want to get rid of an agricultural policy that costs their families £1,000 a year in higher food prices and all their instincts of fairness want rid of a system that puts the interests of wealthy farmers in France ahead of those of poor farmers in the developing world. Last June, the Prime Minister set out to secure a deal that would achieve all that. Instead, he agreed to the opposite, and the papers before the House this evening describe that failure: a deal that leaves the EUs accounts unreformed, that sees the CAP secure for a further six years and that will cost British taxpayers more while giving them nothing in return.
Members have a choice this evening either to endorse failure or to send a signal that they really want to represent the interests of their constituents and that they expect a British Government to work for real reform in Europe and to fight for the interests of British taxpayers. It is a chance for hon. Members to show that we are in touch with the views of our constituents, even if the Prime Minister is not.
Keith Vaz (Leicester, East) (Lab): It is always a pleasure to follow the hon. Member for Altrincham and Sale, West (Mr. Brady). I have heard his speech before. The Minister for Europe has just taken up his position and the last time that he had it, of course, was in 1999, so he has not had the pleasure of hearing the hon. Gentleman speak on European issues. His entire
speech consists of describing Britains contribution to Europe as a failure. Not once did he put forward any proposal on what the Conservative party feels on these issues.
Mr. Brady: I am afraid that I must correct the hon. Gentleman on that point. I do not regard Britains contribution to Europe as a failure; I regard the Prime Ministers contribution to the negotiations for a new budget as a abject failure.
I welcome my right hon. Friend the Minister for Europe back to a job that he did so well. I succeeded him as Minister for Europe. This is not a bid for his job. He was there for three months. I knew that he would come back, so I left his telephone in exactly the same position he left it in, with the same numbers on the speed dial. I know that he will find that his return to that post will enable him to push forward the European agenda.
I pay tribute to my right hon. Friend the Secretary of State for Scotland for the work that he did in that post. I know that my hon. Friend the Member for Glasgow, South-West (Mr. Davidson) believes that my right hon. Friend was responsible for scuppering the European constitution. I do not for one moment believe thathe did so. He conducted himself extraordinarily well during the presidency, as the did my right hon. Friend the former Foreign Secretary, now Leader of the House. It is important that a real heavyweight has the job of Minister for Europe. As I said in my letter to The Times today, I believe that we should go one step further and have a dedicated ministry for European affairs within the Foreign Office, with a Cabinet Minister of the stature of my right hon. Friend, so that we can continue to monitor the EU and hold it accountable for its work.
Mark Pritchard: I am sorry that I missed the hon. Gentlemans letter to The Times todayI must have read The Daily Telegraph for a changebut I wonder whether he agrees that the House should be concerned when Prime Minister Prodi suggests that the European constitutional treaty should be revived.
Keith Vaz: No, because that has always been Romano Prodis position. Since he was the President of the Commission when the constitution began, I am not at all surprised that he decided to say that, following his election as the Prime Minister of Italy; but this debate, of course, is not about the European constitution, although it is timely, because the Commission will publish its response on Wednesday to the period of reflection on the constitution. We look forward to reading what it has to say. It is important to reach a conclusion on that very wide issue, which is a concern for hon. Members and, therefore, for members of the public as well.
John Bercow: The hon. Gentleman is both a Europhile and a humanitarian. Will he tell the House whether, in all candour, he thinks it acceptable to approve a budget that continues to allow the EU to spend €64 billion a
year on trade-distorting domestic agricultural support, the effect of which is to exacerbate the plight of the most destitute people on the planet?
Keith Vaz: I am most grateful for the hon. Gentlemans intervention, because I have enormous respect for the way in which he campaigns on third world poverty, and I agree that the issue must be resolved. I do not believe that we could have resolved it during our presidency. It takes longer than six months to resolve such fundamental issues, but we need to ensure as we continue to campaign on European issues that we put matters right, because it is inappropriate in this day and age to spend so much basically propping up French agriculture at the expense of farmers not just over the rest of the EU, but in the third world.
The hon. Member for The Wrekin (Mark Pritchard) mentioned the new document published on 5 May. It does not have to be reprinted, because it does not contain a photograph of the last Minister for Europe, although I made sure, when I was Minister for Europe, that my photograph was included in the documents.I think that it contains a photograph of the hon. Member for Stone (Mr. Cash) on page 30at least, the back of his headand he appears to be entering some kind of starship on the way to another planet, although I do not want to be nasty to him, because he will celebrate his birthday, I think, on Wednesday,while the hon. Member for Twickenham (Dr. Cable) will, incidentally, celebrate his on Tuesday. Todayis Schuman day, when members of the European Commission can have the day offit is a public holiday. I am not suggesting that we should have a public holiday for the birthday of the hon. Member for Stone, but I am making a serious point. The document is important, because it is absolutely vital that we explain to the British public what happens not only to the money that the Government spend, but to the money that the EU spends.
Mr. Cash: The former Minister for Europe asks about where the money goes, which provokes an immediate outburst of enthusiasm among Conservative Members. May I point out that, in respect of the European agricultural guidance and guarantee fund, there were irregularities of €82 million in 2004 and that, on structural measures, irregularities for that year totalled €531 million?
Keith Vaz: That is totally unacceptable. It is absolutely right that the Court of Auditors should be satisfied about how public and European money is spent. I am sure that Ministers and their colleaguesnot just in the Treasury, but in other Departments and those who represent the Foreign Office, such as my right hon. Friend the Minister for Europewill ensure when they go to European meetings that they will continue to do what British Ministers from parties on both sides have done in the past, which is to do their best for Britain.
Philip Davies (Shipley) (Con): Does the hon. Gentleman not think the pattern of events extraordinary? Each year, the Court of Auditors refuses to sign off the European Union accounts and, each year, the British Government give more and more money to the European Union. Does he not think it quite extraordinary forany Government or body to give more and moremoney to an organisation where the accounts cannot be signed off?
Keith Vaz: It sounds a daft thing to do, but we have entered into obligations and need to make sure that we fulfil them. However, that does not derogate from the fact that the Court of Auditors has made it clear that there are problems with the accounts and that British Ministers have to make sure that the European Union is held to account for what has happened.
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I must pick up the hon. Gentleman on the pointmade by my hon. Friend the Member for Buckingham (John Bercow) about the huge subsidies that the European Union uses to block free and fair trade with the rest of the world. My hon. Friend and I attended the World Trade Organisation talks in Hong Kong in December and, as a British delegate, I felt deeply embarrassed by the number of African and Asian delegates who came to see me who were absolutely appalled at the way in which the European Union was behaving. When is the European Union going to address that?
Keith Vaz: The hon. Gentleman asks me the question as though I speak for the European Unionof course I do not. When British Ministers go to summit meetings or have meetings with their colleagues in the European Union, they do what is in the best interests of this country, as they have done for the past 20 years, whatever their party. That is what our Ministersdo at the moment, as they did under previous Administrations. It is important that we continue to campaign on those points.
The hon. Gentleman reminds me of the importance of the deal entered into during the negotiations under our presidency. He makes a lot of his Polish origins. I have read some of his speeches, but not all of them. He frequently tells the House how important it is that his family came from Poland and that he lives in the United Kingdom, where he was born. That reminds me of the importance that we placed on enlargement. We agreed the deal last December because we are the champions of enlargement. We could not have been left in a position where the new member states that joined on 1 May 2004 could not fund the enlargement process.
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