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19 Nov 2007 : Column 979

Andy Burnham: I shall give way first to the right hon. Gentleman and then to the hon. Gentleman.

Mr. Redwood: Will the Minister tell us what our total gross contribution as a country will be between 2007 and 2013?

Andy Burnham: I will answer the right hon. Gentleman, but Members are tempting me to the meat and detail of my speech before I have reached them. The overall gross contribution will rise—the figure is a rough one; obviously, we are talking about forecasts—by about 3 per cent. a year during this financial perspective. I shall come directly to the figures later. Obviously, there was a bigger increase in the net contribution rather than the gross contribution.

Philip Davies rose—

Andy Burnham: I apologise to the hon. Gentleman; he has waited a long time.

Philip Davies: The Minister has been generous in giving way. He takes the view that the deal is good for Britain and that spending all that money is in our interest, and I disagree fundamentally. The Court of Auditors has refused to sign off the accounts for the 13th year running. Even if one accepted the Minister’s argument, one would still have to ask how on earth he can say that it is in British taxpayers’ interests to keep giving more and more money to a body open to so much fraud and whose accounts the auditors will not sign off. Is there, anywhere in the world, any other organisation whose accounts have not been signed off by auditors, but to which the Treasury would agree to keep giving more and more money?

Andy Burnham: I hope that the hon. Gentleman will keep his seat, because I am going to read out one of his own quotations later—a treat that we can all look forward to. The statement issued by the Court of Auditors last week showed some progress, but it was disappointing, and there needs to be further progress. Let me refer him to a report by the House of Lords on this issue, which states that

[ Interruption. ] I simply refer the hon. Gentleman to that learned document on the European accounts, which he should consider before he indulges in his sweeping and ill-informed generalisations about what those accounts mean.

Mr. Cash: May I try to correct something on which I think that the Minister—I say this in all fairness—misled the House just now, as did the right hon. Member for Rotherham (Mr. MacShane)? “Misled” is perhaps overdoing it, but they inadvertently got their figures a little muddled. The figures on net contributions per head, which are of extreme interest to individual members of the electorate, produce a quite different answer from that proposed by the right hon. Member for Rotherham. In the United Kingdom, we pay €124 per head, which is the third most. Denmark pays the second most, with €127, and the
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Netherlands pays the most—€241. Germany’s net contribution per head is only €100, while France pays only €50. Does not that rather blow his argument out of the water?

Andy Burnham: I know that the hon. Gentleman gets heated on these matters, but I urge him to use temperate language. I have not misled the House. He has brought his own set of figures to the debate. The point that I was clearly making was that on the basis of gross national income, the agreement that we are about to discuss—I hope that he will begin to let me discuss it in more detail—leaves France and Britain in rough parity in terms of our overall contributions to the EU budget. I stand entirely by what I said.

Mr. MacShane: Assuming that the hon. Member for Stone (Mr. Cash) is reading from the same document as me, the UK is at the bottom of the column, where it says that the figure is €68 per head. He read out the Swedish figure of €124 per head. I am tempted to say something to him in Swedish, but it would be helpful if he were able to read a column of figures before contributing to the debate.

Andy Burnham: If anybody is watching at home, I will leave it to them to draw their own conclusions about who has been misleading the House.

Madam Deputy Speaker (Sylvia Heal): Order. I think that we should now move on. People are quoting different sets of figures, which are matters for debate. Perhaps we can now proceed.

Andy Burnham: A visit to an optician’s in Stone might be in order, too.

This Government will continue to make the positive case for an enlarged and prosperous European Union as being directly in our national and economic interest. Britain benefits from being part of an open, prosperous Europe of 500 million people. The EU is Britain’s largest market by far, and—I hope that Conservative Members will listen to this point—it follows that British business needs a Government who engage constructively in discussions about the operation and rules of that market. It is precisely because we engage constructively, rather than grandstanding and posturing, that we secure results that are in the national interest.

To aid our debate today, let me put some facts on the table. First, the Bill and the agreement that it implements will preserve the British rebate in full on all spending on the EU15 and on all agricultural spending on the EU27, irrespective of their accession dates. The abatement has the same basis as it did at its inception at Fontainebleau in 1984. The rebate will be disapplied only on non-agricultural expenditure, which primarily supports economic development in the member states that have joined the Union since 30 April 2004.

Mr. Peter Bone (Wellingborough) (Con): Will the Minister give way?

Andy Burnham: I shall give way to the hon. Gentleman, but let him answer this question: does his party support helping those countries to improve their economic development?

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Mr. Bone: The Minister said that it was in our economic interest to be in the European Union. When we went into the Union, we had a trade deficit with the EEC of £1.327 billion. That was recalculated to be £11.3 billion, and today’s balance of trade deficit with the European Union is £38 billion. That represents 80 per cent. of our trade deficit. When we went in, it was only 50 per cent. How is that an economic positive?

Andy Burnham: I fear that some more dodgy Tory figures are being quoted there.

Mr. Bone: On a point of order, Madam Deputy Speaker. Those figures were given to me by the Library.

Madam Deputy Speaker: That is not a point of order for the Chair, but the matter is now on the record.

Andy Burnham: I am glad about that.

The hon. Gentleman may not like it, but the EU is our largest trading partner. It accounts for 57 per cent. of our economy, and if he is arguing against that, I would like to see him justify what he says to the businesses in his constituency.

Mr. Quentin Davies (Grantham and Stamford) (Lab): Will my right hon. Friend take it from me, because I know a tiny bit about it, that Conservative statements on this matter have to be treated with the greatest degree of scepticism? A large number of Tories have no problem at all in making completely contradictory statements on anything to do with the EU because their actual agenda is to destroy our relationship with the Union in the first place.

Andy Burnham: My hon. Friend says it all. There speaks the true voice of experience and reason in this debate.

Chris Bryant (Rhondda) (Lab): I hope that the true voice of reason will continue now. The more important point about workers in this country is that if the new accession countries had not come into the European Union, they would still have been competing with Britain on jobs, but on the basis of weaker health and safety regulations and weaker workers rights; they would have been competing in the bargain basement. We need them to develop economically so that we can all compete on the basis of added value.

Andy Burnham: My hon. Friend makes an incredibly important point that produced silence from the Opposition Benches. Outside this Chamber, British businesses will understand his point and why it holds true for them and the competitiveness of this country. It is also true that the amount of trade that this country has with the A8 countries has increased significantly since their accession to the EU. It is a question of having not just a level playing field, but more trade as well. That has got to be good for the British economy.

Mr. Philip Hammond: The right hon. Gentleman is making a valiant attempt to defend the indefensible. If the deal is such a good one for Britain, will he tell us why, when the previous Prime Minister came back from Brussels with it in his knapsack, the present Prime
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Minister ran around briefing every journalist he could get his hands on that it was a bad deal for Britain and that he would never have signed up to it?

Andy Burnham: This was a deal that the former Prime Minister and the current Prime Minister jointly agreed, and if the hon. Gentleman and his hon. Friends will let me, I want to explain why. He has not exactly given me a chance to do so in the debate so far.

Mr. Siôn Simon (Birmingham, Erdington) (Lab): Will the Minister explain, because we find it difficult to understand, why Conservative Members interrupted him when he was talking about the disapplication with regard to economic development in accession countries in order to tell him about the deficit? How on earth can British markets be expanded unless economies are developed and expanded in the rest of the Union? It is economic illiteracy, and it is ridiculous.

Andy Burnham: It certainly is, and I am grateful to my hon. Friend for making the point. Any informed commentator listening to this debate outside will understand what he has just said. I would be interested to hear the discussions that the Opposition have with the CBI on such matters, because many of its members take a very different view from that which they put forward.

Daniel Kawczynski: Will the Minister give way?

Andy Burnham: I would very much like to make some progress from my first point, and that is what I shall do.

Secondly, on latest forecasts the rebate will rise in value over this financial perspective, not fall, to an average of €6 billion a year from 2007. As the former Prime Minister told the House, overall the abatement will get us back around €41 billion in this budget period, which is more than in the last one. Thirdly, the agreement will see sensible, restrained growth in the overall budget. The latest forecasts are that the budget will fall below 1 per cent. of EU gross national income in commitment terms by the end of the financial perspective. Overall, the budget will grow by just 7 per cent. across the financial perspective, as compared with growth of 17 per cent. in 1988 and 22 per cent. in 1994. I wonder which Government negotiated those EU budgets.

Mr. Davidson: May I clarify one point with the Minister? He says that our rebate is going up, but will he confirm that the rebate is a percentage of the difference between what we pay in and what we receive back? If the rebate is rising, the gap between what we pay in and what we receive is also rising. Rather than being enthusiastic about the rebate rising, we should look for it to fall, so that our gap falls, too. Surely that is the case.

Andy Burnham: My hon. Friend is correct that that is how the rebate is calculated. Indeed, the first line of article 4 of the Council decision on own resources says:

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Those on the Opposition Benches who claim that the rebate has been lost in the decision simply have not read the own resources decision. My hon. Friend’s point about the gap is correct, but that is because there is a disapplication of the rebate on economic and structural spending in the new member states, as I have explained. With those countries having been welcomed into Europe, our judgment is that the right thing to do morally is equip them to compete competitively. If we did not do that, we would be in breach of our responsibilities as a full member of the European Union. That explains the gap to which my hon. Friend has drawn the attention of the House.

Let me put on record more facts about the Bill. Fourthly, in response to the right hon. Member for Wokingham (Mr. Redwood), the UK’s contribution is forecast to rise on average by 3 per cent. in real terms from 2007 to 2013. Fifthly, in answer to my hon. Friend’s question a moment ago, new member states will receive €158 billion in structural and cohesion funds in this financial perspective—a 250 per cent. increase on the previous financial perspective period. The share of new member states’ receipts will rise from 24 per cent. of the total to 56 per cent. in 2013. Lastly, because of the shift in spending from west to east, all wealthier nations will see their net contributions rise, some by more than others. In this financial perspective, French and UK net contributions will be in rough parity, with French and Italian contributions rising twice as fast as ours.

Rob Marris (Wolverhampton, South-West) (Lab): If we cut to the chase, are there not two key questions? One is: is the United Kingdom a member of the European Union or not? It is a club and there is a price to pay for belonging to a club, and I think that the price is well worth paying. The second question, the answer to which ought to be clear on the Labour Benches at least, is: are we in favour of redistribution of wealth? We certainly are on these Benches, particularly with regard to the Government’s magnificent record both in international development and within the European Union, with redistribution of wealth from the west to the east, so that ultimately we will all be richer. So I have two questions: are we in or are we out, and are we in favour of redistribution of wealth?

Andy Burnham: I say yes to the first question. My hon. Friend has tempted me to give a non-new Labour answer to the second question, so perhaps a fudge is in order— [ Laughter. ] I am joking, of course. He has made his point incredibly well. Let us cut to the chase, as he suggested. We support making a contribution to help the countries of eastern Europe to prosper. That is the crux of this debate. That is the difference. Let me get to that point.

The Leader of the Opposition said in a speech in March this year:

He is right; the work is far from done. The economies and infrastructure of the new EU member states need considerable investment and support before those
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states will be able to compete in the market on an equal footing, and that process of regeneration is now just beginning in earnest. The Leader of the Opposition is the self-styled champion of those countries, but what kind of champion does the easy bit, providing the fine words, but then looks shiftily away when asked to back up those words with real financial commitments from the wealthier, established EU nations? The countries of eastern Europe need real champions who are prepared to step up to the plate, not fair-weather friends whose words are worth nothing at all.

Daniel Kawczynski: I feel very cross with the Minister for suggesting that we do not want to help the eastern European countries. My grandfather came to this country from eastern Europe during the war, and we on the Opposition side of the House feel passionately about those countries. Our problem is that we do not expect the United Kingdom to have to stump up all the cash; France, Germany and the others should do so as well. The Minister’s comments are outrageous.

Andy Burnham: Perhaps the hon. Gentleman’s are, too. How on earth can he justify voting against the Bill tonight, if he says that he favours providing the support to help the economies of eastern Europe? How on earth can he troop through the Lobby to oppose the Bill when all the wealthier nations of Europe have agreed to make contributions to aid the economic development of eastern Europe? As I said to the hon. Member for Falmouth and Camborne (Julia Goldsworthy), Cornwall has benefited from structural funding, as has Merseyside. We have seen their economies improve. Ireland and Spain have benefited from the funding, and their economies have also improved. All our business benefits from those enhanced and improving economies, yet the hon. Gentleman wants to deny those opportunities to the economies of eastern Europe, even though his party claims to support them. That is disgraceful.

Mr. David Heathcoat-Amory (Wells) (Con): The Minister’s case seems to be that public expenditure in eastern Europe is bound to be a good thing. Would he, however, put his own money into a company whose accounts had been rejected by the auditors for 13 years? If not, why does he want to increase the sum of public money to be committed over seven years, when the European Union has failed its audit test for the past 13 years?

Andy Burnham: Because I favour the development of the European Union and the peace and prosperity that the European Union has brought. It is delivering unparalleled living standards to its member states, principally the member states of longest standing. That is how I justify the measures. If the right hon. Gentleman had been listening to me, he would know that I said that they would bring much-needed social and economic regeneration to the parts of Europe that most need it. The long-term benefit of those arrangements will come to our economy, because they will increase our trade with those countries and build more prosperity in them. As my hon. Friend the Member for Rhondda (Chris Bryant) said a moment ago, they will also create a level playing field on which British companies can compete with companies in those countries when selling goods into the world market.

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