Kitty
Ussher: I thank the hon. Member for Taunton for his advice
on negotiating. I am not sure that I should take it on board, given
that I would like at least to speak to the French during the
negotiations. However, he has given me food for thought.
I shall speak
only briefly, as we have had a useful debate. I remind the Committee
exactly where we are in the process. The preliminary draft budget goes
before the Council for the first time during the next couple of weeks.
Today, I am doing the same as Ministers throughout the EU and seeking a
mandate for the negotiations that will be pursued. It would be entirely
wrong to think that the numbers in the papers before the Committee will
be the same as those that will emerge at the end of the process. The
Committee will be able to haul me back at the end of the year, once the
process is completed, and I shall then be able to say where we ended up
and why, and explain the view that the EU Government took and the
extent to which we were successful in our negotiations.
Mr.
Gauke: The EU
Government?
Kitty
Ussher: I apologise. I meant the UK Government. It has
been a rather long afternoon.
I turn to
what can be taken from the last hour and a bit. It has been a useful
conversation. The Committee believes that we should continue to focus
on admin expenditure and value for money, but there remain serious
questions on how the Galileo project will be managed and financed. The
Committee also suggests that we should probe how aid spending is
implemented throughout the EU. There is huge consensus in the UK that
we need fundamental reform of the EU budget; indeed, there is
cross-party unity on that question. As I said, we need to keep real
pressure on the Galileo project. The fact that the European Court of
Auditors has been unable to discharge the accounts for so many years is
a huge concern to people in the UK, and I will continue to make that
point on their behalf and that of the Committee. It is useful that I
and the UK delegation will be able to say what concerns
parliamentarians. I thank the Committee for that.
Other issues
were raised that were unhelpful. I have said it before and I shall say
it again. There is nothing in the preliminary draft budget for 2009
that presumes that the Lisbon treaty has been implemented. It is
important to make that 100 per cent. clear.
I shall do my
best to respond to the hon. Member for Altrincham and Sale, West. If I
do not complete the answer, I shall follow with correspondence. He said
that preparatory actions do not require the same legal basis as other
budget lines. Preparatory actions are funding for small trial schemes;
they are measures taken to test, trial or prepare future programmes.
They include, for
example, preparatory actions for victims of terrorist acts. In the
financial programming documentation, €8.6 million has
been allocated to preparatory actions under headings 1a, 2, 3 and 4. It
is not possible to say definitely that the spending all falls within
the scope provided in the financial regulation to which the preliminary
draft budget and the hon. Gentleman refer, but it represents an upper
limit. We can delve into the detail in a different way if
necessary. Mr.
Brady: Again, I understand the constraints under which the
Minister operates. However, paragraph 2.4 has five areas within which
expenditure can be made without legal base. One is pilot schemes, one
is preparatory actions, and another is preparatory measures in the
field under article 5 of the treaty. I would be grateful, therefore, if
the Minister could go into a little more detail—perhaps in
correspondence later—about what exactly that expenditure is and
how it breaks down between each of those five
areas.
Kitty
Ussher: Of course, but the documents make it clear that
the Commission has a working report on that area, which is about to be
published—if it has not been already. I shall ensure that the
hon. Gentleman has a copy of the report along with any necessary
commentary. The
hon. Gentleman also raised a point about the seventh framework
programme and the level of UK receipts derived from that. I cannot
provide him with a precise answer, because seventh framework funds are
open to a competitive bidding and procurement process happening in real
time. The main thing for us is to ensure that the process is open and
transparent, so that UK companies can obtain contracts purely on merit,
rather than on the basis of behind-the-scenes lobbying. Galileo
produced some success in that regard, and we will continue to push
that. However, across heading 1a, which includes the seventh framework
programme, UK receipts are about 10 per
cent. A
question was asked about how exchange rates affect the UK contribution.
As I have said, they obviously affect the net position of our national
budgets, which we publish routinely. A variety of factors can impact on
all member states’ share of finance in the annual budget.
Exchange rate movement impacts on the UK gross national income and VAT
basis when converted into euros and affects traditional resources,
including customs and VAT. Furthermore, member states’
contributions might fluctuate from year to year because of the level
and timing of payments received and receipts to and from the EC budget.
Exchange rates affect our contribution on an ongoing basis, which is
why we always ensure that the budget lines are clear within our own
accounts, so that they can be analysed
afterwards.
Mr.
Brady: I realise that this is a very complex aspect, and
that there are all sorts of different interactions. However, I think
that the Minister is broadly confirming that, if sterling falls against
the euro, our net contribution will be
bigger.
Kitty
Ussher: I am not sure—I guess that that would be
logical. However, a number of other factors would have an impact as
well. Perhaps I should write to the hon. Gentleman setting out exactly
how it works in practice, because it would depend hugely on when
payments are received across the board. It is extremely complicated. Of
course, it flows the other way as well, because we would be collecting
VAT receipts, for
example. The
hon. Gentleman also asked what the €1.5 billion for information,
society and media is spent on. He asked, so I shall answer. A number of
activities are funded under that part of the budget: electronic
communications policy to promote competition, investment and innovation
in the electronic communications sector; the promotion of safer
internet usage, particularly among children, and the fight against
illegal content at an EU level; the 2010 co-operation programme, which
aims to support research and innovation in the EU in the field of
information and communication technologies, and the capacity to
research infrastructure programmes, including the MEDIA 2007 programme,
many of which are designed to benefit all member states collectively
through enabling co-operation and cross-EU investment. There is no
evidence that Ireland’s receipts would be disproportionate in
that field of the
budget.
Mr.
Brady: The Minister has been very helpful, but I want to
pursue this a little further. She has confirmed my misunderstanding of
the figures—I thought that it was €150 million, not
€1.5 billion. I shall probably be struck off the Treasury
Committee now. I am also grateful that she responded to my specific
question about expenditure in the Republic of Ireland by saying that
there was no evidence of disproportionate expenditure. Is there
evidence of what the expenditure is and therefore whether it is
proportionate, or is it simply that there have been no reports, as yet,
of disproportionate
expenditure?
Kitty
Ussher: There is no evidence that Ireland’s
receipts would be disproportionate in that field of the budget. The
Committee might be entering the area of diminishing returns, and I
foresee a long and detailed correspondence with the hon. Gentleman,
which of course I look forward to.
In
conclusion, this has been a useful debate in highlighting the areas on
which parliamentarians wish the UK Government to focus. There is huge
agreement, and we shall continue to fight to ensure the best possible
value for money for the UK taxpayer. I look forward to our continuing
debates over the course of this
year. Question
put and agreed
to. Resolved, That
the Committee takes note of the unnumbered Explanatory Memorandum from
HM Treasury dated 2nd June 2008 relating to the Preliminary Draft
Budget of the European Communities for the year 2009; and supports the
Government's efforts to maintain budget discipline in relation to the
budget for the European
Communities. Committee
rose at ten minutes to Six
o’clock.
| 
