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19 Nov 2007 : Column 1003

At a time when many priority areas of public spending are under intense pressure in the UK, how can this Government contemplate giving away £7.4 billion of British taxpayers’ money in exchange for absolutely nothing? That money would pay for 45,000 nurses, 37,000 teachers, 42,000 prison places or, if the Chief Secretary prefers this currency, 1.2 million hip replacements. It would also pay for much-needed equipment for our front-line troops in Afghanistan and Iraq.

We are used to this Government’s casual attitude to public money: £5.7 billion was wasted on tax credit overpayments; £3 billion was spent on nine NHS reorganisations in nine years; and £141 million was wasted on an abandoned Department for Work and Pensions IT programme. We are used to tough rhetoric on Europe followed by craven surrender, and we are used to broken promises: there were broken promises on the referendum; a promise has now been broken on the rebate; and no doubt promises will be broken on the red lines. The Bill is so objectionable, because it embodies all those failures of government in one measure.

We were promised that the rebate would be non-negotiable, yet it was surrendered without a fight. The Government talked tough about how they would force the scrapping or at least the radical reform of the CAP, but the CAP will remain untouched. At a time when our public services are feeling the squeeze, when our troops in the front line are short of equipment and when our schools are falling down the world league table, this Government propose casually to chuck away £7.4 billion of our money. By giving away our rebate, which has been worth £54 billion since it was negotiated in 1984, without securing anything in return, this Government have manifestly failed in their paramount duty to protect Britain’s interests.

We have a chance to salvage the situation. By rejecting this Bill tonight, Parliament has the opportunity to rectify the damage caused by the incompetence and duplicity of this Labour Government, to stand up for the interests of Britain and British taxpayers against an Executive who have broken their promises and betrayed the people’s trust, and to send a clear message that Britain’s hard-won rebate is not for giving away. I urge hon. Members to seize the chance this evening to send the Government back to the negotiating table in 2008, in parallel with the promised budget review, and to enter into a good-faith discussion about the rebate, the budget and the future of the CAP on the clear basis that all three are linked and that there will be no change to the British rebate formula unless there is long-term, sustainable reform of the CAP. This is our last chance. If the Bill is passed, Britain’s rebate, and with it the principal lever to secure sustainable reform of the CAP, will be gone. I urge hon. Members to deny the Bill a Second Reading and to keep the cause of EU reform alive.

6.5 pm

Mr. Denis MacShane (Rotherham) (Lab): EU finance is horrendously complicated, and I wish the Chief Secretary and the hon. Member for Runnymede and Weybridge (Mr. Hammond), who spoke with considerable passion and eloquence, luck as they grapple with that problem.

EU finance is to the 21st century what the Schleswig-Holstein question was to the 19th century. As a historian,
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Mr. Deputy Speaker, you will remember the Schleswig-Holstein question. Lord Palmerston said, “Only three people in the country understand the Schleswig-Holstein question. One is dead; one went mad; and I’m trying to forget.”

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. If there are only three and I am one of them, I hope that the right hon. Gentleman will clarify the situation.

Mr. MacShane: I was referring to your knowledge of parliamentary history, Mr. Deputy Speaker, and not to your expertise on the frontier regions between Denmark and Germany.

Kelvin Hopkins: Will my right hon. Friend give way?

Mr. MacShane: The Chief Secretary was extraordinarily generous in giving way, and as a result his speech lasted for well over an hour, which was not his fault because most of the time was taken up by interventions. The shadow Chief Secretary was also generous in giving way. I want to make my points—but I will give way to my hon. Friend.

Kelvin Hopkins: My right hon. Friend began his speech by correctly stating that the system of European finance is complex. I agree with him, and have suggested on many occasions that we should replace it with a simple system of fiscal transfers from rich nations to poor nations and get rid of all the complication in between. Is that not a good idea?

Mr. MacShane: I will come on to that point, because part of this debate is about a transfer from a very rich nation—our own—to some very poor nations. I am disappointed by the mean-minded approach that we have heard from Opposition Members so far on that matter.

We need to go back into parliamentary history, although not as far as Lord Palmerston. When Baroness Thatcher brought back the rebate in 1984, one MP asked:

That was my right hon. Friend the Member for Blackburn (Mr. Straw), now the Secretary of State for Justice, who is a distinguished friend of all Labour Members and a stunningly successful Minister.

The then Prime Minister was also taken on by the then leader of the Labour party, who is now Lord Kinnock. In the same debate, he said:


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I think that Conservative Front Benchers will do me the courtesy of saying that there is a little similarity between the points that they have made and the points made in that debate 23 years ago.

Mr. Jim Cunningham (Coventry, South) (Lab): My right hon. Friend mentioned Baroness Thatcher; it is worth mentioning that during that period she was going to sort out the common agricultural policy, but got bought off by the rebate. That is what actually happened.

Mr. MacShane: At the time of Mrs. Thatcher’s premiership, spending on the CAP was significantly higher—about 80 per cent. higher—than it is today. It has come down consistently in real and percentage terms, and it is still going down. One can put nominal figures on that: it has gone up from—whatever you like—€40 billion to €43 billion, but that has to be seen in the context of the share of member states’ GDP that goes towards EU financing as a whole. Does the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) want to intervene?

Daniel Kawczynski indicated dissent.

Mr. MacShane: He will come in later, I am sure.

During the debate that I mentioned, senior members of my party—its leader and one of its brightest young stars—were roaring with Europhobic and mathematically illiterate nonsense at the good deal that the then Prime Minister had brought back. Later in the debate, she was challenged about why she was not spending the money on British priorities—a point that was also made today by the shadow Chief Secretary to the Treasury. Lady Thatcher said, “Are you saying that we should not help the poor people of Portugal?” She stood there and told the Labour party to be generous to poor countries in Europe. In effect, she agreed to a significant increase in the overall budget—to 1.4 per cent. of European GDP, an increase of about 40 per cent. The EU budget is now lower as a share of European GDP. Again, I salute Margaret Thatcher; there are things in Europe that can be done better collectively than through the mechanisms of 27 national states. She was right then, and this Government are right now. I invite Conservative Members and Front Benchers to become a little more Thatcherite; it will not do them any damage at all.

The hon. Member for Shipley (Philip Davies) has left his place; he wants us to quit the European Union, and some other hon. Members are joining him. The hon. Member for Stone (Mr. Cash) has quit his place, probably to prepare for the longer debates that will take place when the ratification treaty comes back to this House. We are left with the cream and core of the intelligent Conservative party, who understand the figures, and I am sure will make wise contributions.

So far, we have seen from its Members’ interventions the Conservative party that we know and love: right-wing, reactionary, righteous, rabid and utterly contemptuous of the notion that Britain should lend any help to countries and people to whom we owe a debt of honour—and not only that. Playing his usual surrogate accountant’s role, the Chief Secretary went
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on and on about how much money we make from Poland and other such countries. That is true, by the way, but Britain is achieving a nobler ambition through this Bill and its proposals on EU financing—to discharge a debt of honour, which we owe particularly to Poland.

The hon. Member for Shrewsbury and Atcham and I share a concern and a family connection with Poland; he is welcome to make an intervention later. In the past century or so, British history has not been generous vis- -vis Poland. Tory appeasement betrayed Poland to the Russians and the Nazis in 1939, and at Yalta Churchill allowed the division of Europe, and allowed the communists to take control of Poland. In the 1970s a Labour Government even objected to the raising in Gunnersbury of a memorial statue to the victims of the NKVD executions in Katyn in 1940.

As a Government, we have discharged some of that debt by leading the encouragement to Poland to join the EU. To give it credit, in 2004 the Conservative party did not join the rabid tabloid press and its campaign to stop Poles from coming to work here. There were some remarks, but the party did not vote against the Bill in question. I think that the hon. Member for Shrewsbury and Atcham was the shadow spokesman on Europe at the time; we worked together on the issues.

When I was Minister for Europe, something upset me considerably as I went round the eastern European countries and spoke to people. I was asked why they—the people of Poland, Hungary and the Czech Republic—were signing cheques, for €50 million or €74 million, directly to Her Majesty’s Treasury to pay for the British rebate. I could talk about France and the common agricultural policy, but it was not cutting much mustard; such countries were signing cheques to HMT as part of the rebate.

That is how the rebate works; it is not an aggregate sum of money, some of which we do not pay, although that is what people think; it is paid directly by national Governments. I did not have an answer for those countries. After the stunning success of Labour Governments who, after the disastrous economic policies of the preceding Government, have seen national wealth more than double in the past 10 years, how could we, one of the richest nations—not only in Europe, but in the world—say to eastern European Governments, “Your poor people have to pay money to our rich nation”?

Daniel Kawczynski: I agree that Britain has helped Poland and other eastern European countries tremendously. The right hon. Gentleman mentioned Margaret Thatcher. In 1990 she was instrumental, in the Paris club of lending nations, in getting rid of Poland’s debts. However, the way to help countries such as Poland in future is through increased trade and helping British companies trade liberally with Poland, not constantly giving it handouts, as the Bill purports to do.

Mr. MacShane: I do not want to make this a Polish-Polish debate, but I ask the hon. Gentleman to reflect a little on what he has said. In 1982, the communist secret police in Poland put me in prison for taking money to the underground Solidarity union. The following year, Britain imposed swingeing visa controls against allowing Poles to come into the United Kingdom. The year after that, Mrs. Thatcher was
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talking about that faded communist hack Gorbachev as a man with whom she could do business. I accept that once the Poles had won their freedom, Mrs. Thatcher came round to accepting that that was a good thing. However, I wish that she had been a bit stronger in her support when I was in prison, and when the Poles needed to come to this country a bit more easily.

Thanks to the joint work of the Labour and Conservative parties in facing down the anti-eastern-European tabloid press, Poles have been able to come here. However, the tabloids are once again screaming against the eastern European ladies and gentlemen working here.

Yes, I accept that Britain will now pay a bit more. I have no problem with that, because we have had a good deal from the rebate in the past 24 years. Despite what the shadow Chief Secretary said, we are not, in per capita terms, the largest or second largest contributor to the EU budget. Page 32 of the very good Library report shows that we paid 68 euros per head last year. The Netherlands pays four times as much, at 241 euros per head; Denmark pays twice as much at 127 euros per head; Sweden pays 124 euros per head, while Germany pays 100 euros per head. France and Austria pay 50 and 40 euros per head respectively. Those countries, too, are pretty fed up with the assumption that Britain does not have to pay its fair share.

Mr. Cash: I should like to take this opportunity with regard to a point—not exactly an allegation—that I made earlier. I am grateful to the right hon. Member for Rotherham (Mr. MacShane) for correcting himself to a certain extent just now. He specifically mentioned France, which brought me to my feet earlier. Per head, we pay considerably more than France and Italy, but that is without prejudice to the fact that I had said that we contributed much more than we do. I wanted to correct that for the record.

Mr. MacShane: The Francophobia that always infects these debates is jolly good fun, but there are 25 other member states apart from France and the United Kingdom, in the European Union, and the figures vary. I fully accept that there are grotesque anomalies such as Luxembourg. I am getting into some gruesome detail which I would not want to inflict on the House, but the plain fact is that the Netherlands—our trusty old Protestant ally for 300 years—pays four times, pro rata, what we pay. Why on earth should the Dutch always have to pay part of the British bill? That is how they will see it—ditto the Swedes and the Germans. The Germans have spent 4 per cent. of their gross domestic product, year on year, on East Germany following unification. That is twice to two and a half times what the United States put into western Europe under the Marshall plan. The Germans, with a much bigger problem to solve than we have ever had to face—the incorporation of a bankrupt third-world country, the German Democratic Republic, into the western German Federal Republic—have made huge personal sacrifices as a nation, yet still pay proportionately far more, 35 per cent. more, on last year’s figures, than we do. The figures against us are much worse, in terms of Germany, the Netherlands and some of the Nordic countries, during the recent past.


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If we get into arguments that simply state that whatever happens we must pay less than everybody else, the European Union might as well pack up shop. I fully accept the shadow Chief Secretary’s point about the common agricultural policy. I do not deny that for one second. The figure is coming down as a share. Let me read more—I might even be tempted to do it in French this time—from today’s Le Figaro, which says in the course of a long article: “France now accepts that there will have to be a reduction in European Union agricultural expenditure. The debate among the 27 member states will start under the French presidency in the second half of next year. That is when the next pluriannual budget, 2013-2020, will be adopted.” I would love the Conservatives to address this issue, as well as my own Government, because we are not good enough at explaining to partners with sufficient force and vigour that the way in which the European Union budget is constructed is not necessarily the best way for Europeans.

The biggest defenders of the CAP are not the French but the Irish. Ireland—an English-speaking country with a centre-right conservative party, Fianna Fáil, in power—is passionate in defending the CAP. I would invite the Conservatives to talk to Fianna Fáil; I cannot do it, because it is not in the same political family as the Labour party. I would even ask my right hon. and hon. Friends on the Front Bench to create a special EU CAP reform persuasion budget that could be given to the Conservatives, so that they could go to talk to all the ruling centre-right parties in Germany, Poland, the Nordic countries, Netherlands, and France—but, as we know, the Conservatives want to effect a total rupture with the EU’s other centre-right ruling parties. The UK is extremely badly served by a neo-isolationist attitude whereby they will not go and network politically for the common goals that most people in Britain, across parties, would support.

Kelvin Hopkins: My right hon. Friend has made several references to Ireland. If I were Irish, I would be very enthusiastic about the CAP and the structural fund policies, because the Irish are massive net beneficiaries from the budget. At its peak, it went as high as 5 per cent. of GDP, which in British terms would be £60 billion. A net inward transfer of funds from the EU totalling £60 billion might make us rather more enthusiastic.

Mr. MacShane: I am terribly sorry, but page 34 of the Library report shows that in 2006 Ireland received €475 million of structural fund expenditure, while Britain received €3,021 million. [ Interruption. ] My hon. Friend is right in per head terms; I cannot disagree with that. However, I am making a different point: if we want Ireland, France, Germany and other countries to change, we must engage with them. Believe it or not, this debate is not being listened to right now by the good people of Ireland as they settle down to their boiled ham and cabbage and a good pint of Guinness.

Kelvin Hopkins: I return to my previous point. If the system of contributions and receipts from the EU was proportionate to the relative degree of prosperity in the different nations, everyone would be happy.


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