Mr.
Gauke: I am glad that we agree that the 5 per cent.
increase in administration costs is unjustifiable, but the only way
that it could be justified, or at least explained, was if it was
intended to fund those additional posts. As those additional posts do
not appear to exist on the face of the budget, I again put it to the
Minister that there is a strong case for the administration budget to
be reduced, as we are now in a different situation from that in which
the preliminary draft budget was
produced.
The
Chairman: Order. Before we go any further, I will say
gently to the hon. Gentleman that this sitting has been purposefully
divided into an opportunity for question and answer exchanges and an
opportunity for debate. Of course, an element of discretion and
judgment is to be used in distinguishing between the two, but it is in
order at this point for right hon. and hon. Members only to ask
questions, rather than pursue debating points. There will be an
opportunity for the later in the second
phase.
Kitty
Ussher: Thank you for your guidance, Mr.
Bercow. I want to maintain the technically non-partisan spirit that the
Committee has rightly enjoyed in previous occasions, but must suggest
that the hon. Gentleman is seeking to extrapolate a broader political
point from the facts before
us. Mr.
Browne: Tory MEP
expenses.
Kitty
Ussher: “Tory MEP expenses”, I hear from the
hon. Member for Taunton. I would be extremely tempted to go down that
path and might leave it dangling as a stick to incentivise the hon.
Member for South-West Hertfordshire into going in the right
direction.
We think that
a 5 per cent. increase in administration in unacceptable. In the past,
concerted efforts on that budget line have yielded results: we managed
to reduce it by €52 million last year. The proposed increase in
the administration costs is not the result of any kind of budgetary
effect of implementing the Lisbon treaty—if indeed it will be
implemented. I have repeatedly emphasised that work has stopped,
pending the decisions of the Irish, but if we were to get to that stage
and it was necessary, we would expect an amending letter to come in.
Therefore, it is not reflected in this draft budget.
That issue
relates to an extremely serious point about value for money. There are
upward pressures on administration costs that come from the way that
the budget is drafted, and it is unacceptable that those costs should
increase, particularly when the overall level of the budget is going
down and when countries across the EU are undertaking efficiency
exercises, in some cases quite effectively, that are similar to the
Gershon exercises in the UK.
The 5 per
cent. increase appears to be covering the posts linked to existing
decisions on enlargement. That does not necessarily mean that, although
we are in favour of enlargement, we think increased expenditure is
justified, and I will continue to make that point with my colleagues
from other member states. It is important to make it absolutely clear
that Lisbon is not making that figure go higher, it is going higher for
other reasons and it needs to come down regardless of
Lisbon.
Mr.
Browne: Does the Minister, on the contrary, take the view
that there are aspects of the Lisbon treaty that should lead to
administrative savings within the European Union because it streamlines
the process by which decisions are taken? One of the ways that we might
try to have a more effective European Union budget in administrative
terms would be to proceed with the
treaty.
Kitty
Ussher: We have obviously ratified the treaty here. The
hon. Gentleman can draw his own conclusions about whether we should
proceed with it. In terms of the costs savings, as I have said, we
think that there are some cost savings to be made by merging existing
teams. We not sure whether that will cover all of the additional
expenditure required. This may end up being a cost-neutral exercise
anyway, although we suspect that it will not. If it is not, there need
to be cost savings from within existing agreed budget ceilings. We will
push for that very hard with like-minded member states, as and when
Lisbon is ratified, which it may not be. We are not doing anything now.
That is the
point.
Mr.
Brady: May I refer the Minister to document 1, submitted
by the Commission? Paragraph 2.4 sets out five areas where
appropriations can be entered in the budget without a legal base. Can
the Minister tell us what the total of those areas is, and in
particular, the total under exemption 2, which is preparatory actions?
I do not know whether that is specific to the Lisbon treaty or wider. I
should be interested to know the figures.
Kitty
Ussher: I am afraid that the nature of this question and
answer part of the debate is such that I cannot give the hon. Gentleman
a precise answer now, but there is no reason why I should not be able
to do so later on this afternoon. I will certainly endeavour to respond
then.
Mr.
Gauke: May I return to the issue of agricultural spending,
which the Minister has already mentioned? The preliminary draft budget
proposes a 4.8 per cent. increase, which is nearly €2 billion,
in market-related support and direct payments in relation to
agricultural markets. At a time of rising food prices—the
Minister says that we are winning the battle on the reform of the
common agricultural policy—does she think that that figure is
acceptable?
Kitty
Ussher: It goes without saying that we think far more can
be done on the CAP generally. We therefore need to separate in our
minds, as I attempted to do in my opening remarks, what we are trying
to achieve in the routine annual budget negotiations from the broader
reform of the CAP. We will, of course, continue to bear down on all
aspects of the CAP now. We do not particularly see it as justified, but
we accept that this year is not the time to have the debate on wider
reform of the CAP. We will pursue that energetically
elsewhere.
Mr.
Gauke: I am grateful for that reply. May I turn to heading
4 of the preliminary draft budget, which concerns the EU as a global
partner? Another area where there is an increase is overseas aid and
international development. The Opposition have no objection to
increased expenditure on international development, but what is the
Minister’s assessment of the EU as a deliverer of aid compared
with the Department for International Development
?
Kitty
Ussher: Obviously we want the same value for money as
applies in DFID programmes to be extended across the whole of the EU.
There is a case for common external action in some areas. It is useful
to be able to demonstrate real EU concern in some areas. It sends a
powerful international diplomatic signal as well as technically
enabling us to combine resources to give a more targeted response in
certain areas. Also, it does not presume that the UK can do everything
in all parts of the world. However, I am not an expert in this
area. We
are supportive of the proposals under heading 4, whether they are about
development co-operation in Asia or wider aid for the rehabilitation
and reconstruction of Afghanistan. Kosovo and Palestine are areas where
we think that it would be good to demonstrate that the EU is capable of
acting. We also think that transitional assistance in adjustment
support for sugar protocol countries is
valid.
Mr.
Browne: The Minister talked in her introductory remarks
about a switch in emphasis with cohesion funds. Presumably that is
towards the 12 member states that have joined in recent years and away
from western European nations. Will she comment on the specific
implications of that for Britain, particularly for areas such as
Cornwall that have benefited from such financial support? Will she
reflect on the irony that the Irish seem to be particularly
unenthusiastic about EU cohesion despite being the recipients of more
cohesion funds than most nations?
Kitty
Ussher: Two separate things are going on here. First,
parts of the UK are currently receiving welcome and significant amounts
of funding recycled through EU sources and they will continue to do so
through this year’s budget. That is great. Secondly, there is a
broader point about reforming the EU budget. For the best part of five
years, our position has been that taxpayers’ money is spent more
effectively through EU economic, structural and cohesion funding when
focused on the poorer member states. To me, it seems wrong to send
money via Europe back to the UK. That does not mean that we do not
support domestic regional funding. The usual domestic prioritisation
process will ensure that our regions and nations have an appropriate
level of
funding.
Mr.
Browne: I think that most people in the Committee would
recognise that although the GDP per capita in most eastern European
countries is increasing at a greater rate than ours, it is still a long
way behind. Those countries are therefore the natural recipients of
most of the money targeted at trying to raise living standards across
the EU. Putting that to one side, so that the people of this country
understand fully, what are the implications of the switch of emphasis
for communities in the UK that currently benefit from such funds? It is
true that the money has been recycled through the system and that there
is a case for not doing that. Nevertheless, some communities in this
country are the recipients of that funding. How much longer can they
expect to be
so?
Kitty
Ussher: We published a policy document on this matter in
2003 for our EU partners as part of our negotiating strategy, which
said that we thought that UK regional funding should be funded through
our own mechanisms, such as the regional development agencies. We were
unsuccessful in winning that argument. Given that, I am delighted that
places such as those areas that the hon. Gentleman represents were
successful in obtaining funding from an EU
source. We
are now at the beginning of a wider review of the entire EU budget so
we continue to make the broader points that we made. Since we do not
yet know if we will succeed in that, it is too early for me to say
specifically, with a pound sign, what the effect will be on regions of
the UK were we to succeed. I make the general point that we have a
strong regional policy in this country and we believe that we have
effective ways of ensuring that it demonstrates value for money.
Nothing that happens at European level will detract from
that.
Mr.
Brady: I have another detailed question and so I do not
mind if the Minister answers this when she has had further inspiration.
I think it is correct that, according to the expenditure analysis by
policy area, there is €150 million for information,
society and media, and €20 million for communication. I should
be interested to have a breakdown of where that is to be spent, looking
at different member states, especially with a comparative figure
between 2008 and 2009 with reference to the Irish
Republic.
Kitty
Ussher: I would be happy to do so when I sum up the main
debate.
Mr.
Gauke: May I return to the subject of international
development and, in the spirit of inquiry, raise a specific concern
about the EU’s performance in this area? The Minister has
alluded to the issue of the targeting of EU resources on the poorest
countries. Does she share the criticism that is often made of the EU
which is that, unlike the UK which increasingly targets its overseas
aid on the poorest countries, the trend in the EU is the reverse? Very
often it does not go to the poorest but sometimes to neighbouring north
African countries rather than those areas that are suffering the most
significant
poverty.
Kitty
Ussher: The EU intervenes in a number of different areas
and a number of different countries for different reasons, not
necessarily simply on the basis of poverty reduction, important though
that is. There is also an enormous amount of work that different EU
countries can do simply by working together as colleagues without
having an income line coming through the EU budget itself. It very much
depends on what needs to be done and the best way of achieving that.
For example, and I should have said this previously, in some of the
countries such as Afghanistan and Iraq, large scale infrastructure
projects are needed. We simply could not do that alone but everybody
agrees that it needs to be done somehow. It comes back to the general
point that we believe EU action should be taken where the overall sum
is more than its parts and we achieve something by working together.
That will not necessarily mean that we should simply focus on the
poorest, important though that
is.
Mr.
Gauke: I am grateful for that answer. May I highlight one
area where there is some controversy, which is the EU’s
expenditure on international development that is within the Palestinian
territories? Does the Minister share the concern of many that there is
insufficient rigour in ensuring that funding going to the Palestinian
territories does not end up in the hands of militant groups, which
often use it to fund educational projects that spout anti-Semitic
propaganda?
Kitty
Ussher: Obviously we would be extremely concerned if we
thought that that was the case. If the hon. Gentleman has any specific
examples, I should be happy to look into
them.
Mr.
Browne: Section 3 is entitled “Citizenship,
freedom, security and justice”. My understanding is that the
Government are supporting reductions in the budget in that area and
looking for further ways to reduce spending. Given that migration
and—a separate issue—terrorism are rightly preoccupations
of society in this country and across the EU, and given that there is a
huge benefit in trying to co-ordinate policy across all 27 member
states, is it wise to try to reduce expenditure in those sensitive
areas?
Kitty
Ussher: The important thing is to ensure value for money.
We feel that it can be done more effectively. I am not sure that we are
in a position now to get into the detail, but we would be worried if we
thought that the EU’s capability of action in an area where it
should act would be undermined. As a general point, it is probably
worth saying that we think that parts of heading 3a complement national
efforts in an extremely helpful way, so it is not a large
concern.
Mr.
Brady: The budget for the seventh framework programme for
research amounts to some €6.7 billion. Can the Minister tell us
what percentage of that is being spent in the United Kingdom, and how
confident are the Government that we are getting a fair proportion of
EU research
expenditure?
Kitty
Ussher: The hon. Gentleman is probably putting me on the
spot more than any other member of the Committee at this point. A large
proportion is being spent in the UK, and we are working extremely hard
to ensure that more is spent. I was involved in negotiations on the
Galileo project to that extent—although that is perhaps a
slightly different funding stream. Again, I will have to come back to
him on the
detail.
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