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Mr. Philip Hammond: Perhaps we can get back to focusing on the Bill. Will the right hon. Gentleman confirm that its purpose is to incorporate the own resources decision into the definition of the European treaties? It is not going to make any difference to the spending budget. It is about how the cost of meeting the budget is divided up between the member states.
Andy Burnham: The hon. Gentleman is being extremely nit-picking. I invite him to read the own resources decision, and to look at the table in it that spells out how the rebate will be retained on all agricultural spending, and on all spending in the EU15. As I have describedit would be good if the hon. Member for Runnymede and Weybridge (Mr. Hammond) read the decision before making his claimsit spells out how the rebate will be disapplied in respect of economic and structural spending in the new member states. That is how it affects the overall budget. Yes, there is an annual EU budget process, but it is informed by the own resources decision, which the hon. Gentleman has clearly not bothered to read.
Mr. Simon: Assuming that these are the same Tories who so recently raised xenophobic mayhem about the number of eastern European migrant workers in the UK, can the Minister explain what he believes is more likely to be the effect of the sort of economic development in eastern Europe that the measure is underwriting on the very ways of these migrant workers who were so recently subject to such disgraceful scaremongering by Conservative Members?
Andy Burnham: My hon. Friend is absolutely right to point to that complete contradiction. As we have seen with previous EU enlargements, there may have been an immediate increase in the number of people using their ability to move around Europe, but in the long term people are more likely to return to their country of origin, particularly if that country is experiencing economic development and prosperity. This is a long gamenot a short-term gimmick to be played in the House this afternoonthat will bring benefits over a generation rather than over a few months. My hon. Friend is absolutely correct.
Kelvin Hopkins (Luton, North) (Lab): My right hon. Friend is struggling manfully to cloak his dodgy deal in respectability by constantly focusing on help for eastern Europe. If we were asked for a simple straight fiscal transfer to help eastern European countries, that would be one thing, but the reality is that Chirac attacked our rebate simply because we were threatening the common agricultural policy once again. If we got rid of the CAP, we could all give generously to eastern Europe.
Andy Burnham: My hon. Friend may be in search of perfection, but we work within the existing structures to improve and make steps forward where we can. He will know that as part of this package, a commitment was secured to review the operation of the CAP and we intend fully to engage in that review. Generally, I would remind my hon. Friend that this is a good deal for the reasons that I am outlining. I cannot help it when I am drawn by interventions on other points, but I am firmly making a positive case today.
Mr. Davidson: I am grateful to my right hon. Friend for giving way, which is helpful in allowing us a degree of dialogue. I want to make it clear that I do not believe that he is one of the bad boys, but I do think he is a bit of a rascal in seeking to polarise the debate by suggesting that anyone who has any reservations about any negotiated settlement is necessarily in favour of withdrawing altogether or of giving nothing to eastern Europe. That is most certainly not the position of Labour Members who have reservations. Surely the Minister would accept that we have made virtually no progress in reforming the CAP during this settlement and that although the submission of additional money for eastern Europe is welcome, it does not necessarily go to the right people there. It is almost entirely devoted to channelling the common agricultural policy, which, certainly in this country, helps the undeserving rich rather than the deserving poorso will the Minister resign?
Andy Burnham: Thanks very much! I know that my hon. Friend is feeling bad because Scotland lost at the weekend, but that is no reason for him to take his nastiness and resentment out on me. This financial perspective does include reform of the CAP. I do not have the precise figures to hand, but it drops reasonably significantly as an overall percentage of the budget and member states are being asked voluntarily to shift spending away from simple direct support into helping improve the sustainability of local rural economies. So, yes, there is reform. If my hon. Friend is asking me whether that is enough, I would have to say no. We want more reform of the common agricultural policy. That is the very clear position of the British Government and we believe that we have secured the meansthrough the review of the processto achieve it. It is not perfection. I am not arguing that the EU budget and the recently agreed own resources decision represent perfection. We have made progress and continue to do so, because that benefits us all.
Chris Bryant: Many people may be right to argue for CAP reform, which we would all like to see for moral reasonsnot least to do with our trade with Africa and South America. However, does the Chief Secretary accept that we have to recognise that if we did not have the CAP that would probably mean that the French would give money to French farms and the Polish to Polish farms and that the amount of subsidy would increase rather than decrease? That was why Tory Governments always argued that there should be a strong CAP.
Andy Burnham: I suspect that they said that because they knew that that would benefit many constituencies represented by Conservativesit is not something that we hear from Conservatives very often. My hon. Friend has made an important point.
Mr. David Gauke (South-West Hertfordshire) (Con): The Chief Secretary said that CAP spending will fall as a percentage of the EU budget as a whole, but according to figures produced by Open Europe it will rise slightly. Will he confirm that in real terms the CAP budget will increase by 12 per cent. in total spending from this financing period to the next?
Andy Burnham: Of course, the overall budget is increasing in size. The figures to which I referred a moment ago in answer to my hon. Friend the Member for Glasgow, South-West (Mr. Davidson) were percentages of the overall budget. I was trying to illustrate that the overall percentage of spend from the EU budget on agriculture will decrease in this financial perspective. I do not doubt the figures that the hon. Gentleman mentioned, but comparing the overall percentage gives a better indication of how agriculture spending is being reformed in this financial perspective.
Mr. Baron: The Chief Secretary is being very generous and is encouraging a proper exchange of views. He is being slightly disingenuous in the sense that he is forgetting the fact that the Governments original position was that we would not sacrifice any part of our rebate unless there was reform. He has said that there may be reform, but how can there be reform when the French have publicly stated that they will veto any cuts to any future CAP spending?
Andy Burnham: The rebate exists because of distortions in the way that money is spent around the EU. The rebate will remain as long as that is the case. That is the clear position of the Government. I said to the hon. Member for South-West Hertfordshire (Mr. Gauke) that I did not doubt the figures that he gave, but our figures say that the CAP budget will decrease from £55 billion in 2007 to £51 billion in 2013. The Conservative Front Benchers need to check their figures a bit more before they come rolling into a debate such as this and making all sorts of big claims, as they have been.
Julia Goldsworthy: Does the Chief Secretary agree that there are concerns that pillar two of the CAP is being cut, when more resources should have been switched to it? An opportunity was lost to try to undertake such reform.
Andy Burnham: The hon. Lady makes an important point. The agreement invited member states voluntarily to move spending from pillar one to pillar two. If my memory is correct, the UK has decided to switch about 14 per cent. of overall agricultural spending. That is indicative of our desire to see reform in the way in which support to rural communities is spent. We hope that other countries will do the same. In the long term, it is our aim for all agricultural spending to be migrated in that way.
Mr. MacShane: Conservative Members have suggested that France will veto any reform of the common agricultural policy. However, page 27 of todays economic section of Le Figaro statesI shall not read it out in Frenchthat France, the principal beneficiary of the CAP, already knows that it will have to adapt to a lowering of agricultural expenditure in the EU. I could read more from the article. Conservative Members should get up to date.
Andy Burnham: As a simple lad from the north-west, I have never read page 27 of the economics section of Le Figaroperhaps I should. My right hon. Friend makes a good point, which illuminates our proceedings.
Philip Davies: The Chief Secretary said earlier that giving more money to countries in eastern European would benefit British business. Local businesses in West Yorkshire want more money for local infrastructure to help transport. The Government cannot afford to give it. According to them, it is all about spending priorities. Is the right hon. Gentleman genuinely trying to argue that businesses in West Yorkshire will benefit more from building up the infrastructure in eastern Europe than from doing that in West Yorkshire?
Andy Burnham: The hon. Gentleman betrays alarming ignorance of those matters. Businesses in West Yorkshire have benefited over the years from European structural and cohesion funding. I am now looking at details of programmes throughout Yorkshire that support the growth and competitiveness of the region. Why does not he recognise and celebrate that rather than trying at every opportunity to whip up anti-European feeling?
It is in our national interest for our net contribution as a percentage of national income to be roughly equal to that of France and less than that of the Netherlands, Germany and Denmark. That confirms Britain as a middle-ranking net contributor among the wealthier nations. It also fulfils our long-standing commitment to budget discipline. In 1994, a budget of 1.2 per cent. of EU gross national income was agreed. In the current financial perspective, the budget will be less than 1 per cent. of EU GNI, which is nearly 20 per cent. lower. That represents a saving of €160 billion compared with the Commissions original proposal. For the first time, CAP spending will not be the largest item of expenditure in the EU budget. Instead, it will be sustainable growth. The budget is disciplined, with a fair contribution from Britain, which preserves our abatement. The Bill will secure our national interest.
However, there is a bigger picture to consider. It is emphatically in Britains long-term interest to provide for the fair financing and enlargement of the European Union. We thus bring British business immediate market opportunities and secure Europes long-term competitiveness. Achieving a fair deal was the challenge that faced the UK presidency in 2005, but we met it. It means that new member states will experience a 250 per cent. increase in structural funding on the previous financing period.
Britain has been a strong supporter of enlargement and we are proud of the part that we played. That enlargement has made a huge contribution to establishing our central and eastern European partners as the free democracies and vibrant economies that they are today. It is right that we should stand by them and that they should not be denied the economic investment that has benefited Britain and other parts of western Europe so much. As I said earlier, it is also firmly in our interest. Allowing our partners in central and eastern Europe to grow and develop strengthens them and strengthens Europe, making us all more secure. A more developed Europe will be better able to meet the common challenges that we face, such as climate change and security. [Interruption.] I can hear Conservative Members chuntering. We have heard about attempts by the Leader of the Opposition to form a new political party in the European Parliamentthe grandly named Movement for European Reform. It
sounds good, but the problem is that there is neither much European nor a great deal of movement about it. So far they have recruited the Czech ODS party and, to fanfare earlier this year, the Bulgarian Union of Democratic Forces party. There has, however, been a slight setback. On 14 September, the president of the European Peoples party, Wilfred Martens, said:
Six months ago, I said that it is not compatible for a member party of the EPP to join initiatives like this movement and at the same time remain in our party. Today I am glad that the UDF understands and shares our position.
Daniel Kawczynski: On a point of order, Madam Deputy Speaker. The matter commented on by the Chief Secretarythe internal relationships of the Conservative party with its sister parties throughout the European Unionhas nothing to do with the EU rebate.
As I was saying before I was rudely interrupted, the EPP announced the withdrawal from the Movement for European Reform of the Bulgarian UDF. So then there were two. Incidentally, one of them sees no need for a referendum and is in favour of the new EU reform treaty. What does that leave? It leaves the British Conservative party completely isolated in Europe. Is that what British business needs from a party seeking to represent business interests in this countrys biggest single market?
I hope that the hon. Member for Runnymede and Weybridge will enlighten us on progress in the establishment of the Movement for European Reform. Can we conclude that nobody wants to join this new Tory club? Might some of the Conservatives potential new friends have been put off by their weasel words on the financial commitment that they are prepared to make to the enlargement of the European Union? I hope that he will address those points later. One of his MEPs, Caroline Jackson, has said:
I dont know how David Cameron will deal with the pledge
Mr. Philip Hammond:
The right hon. Gentleman has thrown up lots of smoke over the past few minutes. Let us get back to the main point. He is saying that giving up the rebate is in Britains interests and is the right
thing to do. Why, then, did his previous Prime Minister go off to Brussels with a position that the rebate was non-negotiable?
Andy Burnham: The hon. Gentleman keeps saying that we are giving up the rebate, but he has not listened to a word that I have said this afternoon. The own resources decision outlines in detail the arrangements for the British rebate. Perhaps he will read that again before making a further intervention. I have said to him that the basis on which the rebate is calculated remains the same for the EU15 and is being disapplied in respect of structural and cohesion funding in the new member states. He disagrees with that position. I have simply been making the point, particularly in relation to his and his right hon. and hon. Friends efforts to woo partners from eastern Europe, that their failure to back our commitment, and to put up real resource to support the commitment to enlargement, means that nobody wants to join this new Movement for European Reform. They are on their own in Europe. All the western European economies have agreed to make this contribution to improve the competitiveness of eastern Europe. The Conservatives are completely isolated.
Mr. Hammond: Does the right hon. Gentleman recall one of his predecessors as Chief Secretary to the Treasury, the right hon. Member for Oxford, East (Mr. Smith), saying about the rebate and enlargement:
we will benefit from abatement on any new expenditure incurred as a consequence of both enlargement and the ceilings in the existing EU 15... the United Kingdom will benefit very considerably from the application of the abatement to any new expenditure on enlargement.?[ Official Report, 3 July 2001; Vol. 371, c. 145.]
Andy Burnham: I cannot make myself any clearer to the hon. Gentleman than I already have. I told him at the beginning that the value of the rebate rises in this financial perspective. I have also told him that Britain receives immediate economic benefits from increased trade with the new member states, and will in time receive even greater economic benefits.
It is possible that people in those new member states listen to these debates. They will note the position taken by the British Conservative party, and they will hear those words about having always championed enlargement. What are they to conclude when the hon. Gentleman and other Conservative Members argue against the funding that will make an enlarged European Union more prosperous, and stand in the way of all the progress that they claim to want?
Mr. Brady: If this is such a good deal for Britain and our eastern European friends, why did the then Chancellor of the Exchequer seek to reopen negotiations when it was brought back by the then Prime Minister? Why did he think it was such a bad deal then?
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