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Mr. Quentin Davies: Will the hon. Gentleman confront for a moment a point that I put, which is the truth: the criticism is not to do with the Commission,
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as the problems are in the member states? If he understands that, he will see that this issue cannot be used as an argument against the EU itself. It is not the EU or its institutions that are in any way corrupt or wasteful—or if they are, it is only to a very minor degree—and the auditors have not made such a suggestion for years. The problems exist in member states, and especially some in southern Europe. The problems could be resolved by having a more federalist concentration of power in the EU. Does he want that?

Daniel Kawczynski: No, I do not want that, but I want the accounts to be properly vetted so that there is more transparency.

Eastern European countries are struggling to spend the existing vast sums of money that they have been given. During my various trips to Warsaw, people have confided in me that there are difficulties with some of the time scales that the EU has given the Poles to spend the money on infrastructure, as they are unrealistic. It is expecting the Poles to spend billions of pounds on building vast motorway networks across the country when that will simply not be feasible within the time frames given, due to environmental considerations and all the other complications that, as the Minister will be aware, major infrastructure projects inevitably bring about.

The Minister did not mention at all in his speech where the money was going, and I was slightly disappointed about that. If he is so confident that this British taxpayers’ money will be of great benefit, it is a disappointment that he did not have one or two examples to share with the House as to what it could be spent on. I would have liked to hear an assurance from the Minister that some of the money would be spent on helping these countries reduce their carbon dioxide emissions. Owing to its communist past, Poland has hugely inefficient steel plants, such as Nowa Huta in Krakow, that belt out hundreds of thousands of tonnes of emissions. It would be at least nice for some of the money to be spent on helping countries to reduce their CO2 emissions, so I look forward to hearing in the winding-up speech how some of the money will be spent.

The Minister spoke a lot about eastern Europe, but he did not mention British overseas territories. Having spoken to representatives of the Cayman islands, the Turks and Caicos islands and many other British overseas territories, I know that they get a raw deal from the EU. They are currently experiencing terrible problems in getting their hands on money to which they are entitled under European Union terms. Will the Minister assure me that the rebate that he has given away does not affect British overseas territories, and will he give me a commitment that he will help the Governments of the Cayman islands and the Turks and Caicos islands get what they are entitled to? They are fighting to get their fair share and they are coming across a great deal of red tape and bureaucracy.

The hon. Member for Falmouth and Camborne (Julia Goldsworthy) mentioned her concerns about parts of rural England not receiving their fair share of money. I represent a rural part of the UK—Shropshire—that has massive underinvestment in basic public services.

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If I may, I shall explain why I am so vehemently opposed to this outflow of money to eastern Europe. The reason is the problems that we face in the United Kingdom on public services. I visited Coleham primary school in Shrewsbury in my constituency. Its headmistress has worked out that she receives £711 less per pupil than the average per child funding—I am not talking about the best schools—and that equates to a £300,000 shortfall for one primary school in my constituency. I asked how that affects her. She said, “Clearly we cannot buy certain books or put the heating on when we would like, and we have various problems.” How can we be experiencing such problems in the fourth wealthiest country in the world, yet at the same time be giving so much to eastern Europe?

The Royal Shrewsbury hospital is millions of pounds in debt. I have told the relevant Minister that we have a huge funding shortfall. Our local education authority is ranked 145th out of 149 LEAs for funding. Later this evening, I shall present a 16,000-signature petition that aims to prevent the closure of Shrewsbury ambulance control centre. Can one imagine such a thing? At the same time, the socialists are giving my taxpayers’ money to the eastern Europeans—it is unbelievable.

Mr. MacNeil: With the greatest respect to the hon. Gentleman, rather than arguing against giving money to the eastern Europeans, could he not argue against nuclear weapons and make sure that money was not being wasted on weapons of mass destruction and instead was helping his constituents?

Daniel Kawczynski: No. The hon. Member for Grantham and Stamford said that he did not want to give an analysis on Iceland, and I will not start giving an analysis on nuclear weapons.

I believe that much of this is about how effective the negotiators were in dealing with the rebate. Today, if one speaks to Icelandic politicians—we are returning to the theme of Iceland—one finds that they still talk in derogatory terms about how Roy Hattersley negotiated the fishing stocks between Britain and Iceland back in 1978. They still laugh at that. In political circles in Reykjavik it is still talked about, and people there say that the poor negotiation and his poor performance as a negotiator cost the United Kingdom millions of pounds. The deal before us will be talked about in 20, 30 and 40 years’ time as an appallingly bad negotiated settlement that has cost our taxpayers and our children billions of pounds.

8.3 pm

Mr. Austin Mitchell (Great Grimsby) (Lab): I do not want to follow on from what the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) said, but I must put him right on Iceland. What he mentioned was not done by Roy Hattersley and it did not happen in 1978, because he was not in the Foreign Office at that time. The settlement was in 1976 and the proposals that Roy Hattersley turned down were made in 1974. The hon. Gentleman would have done better to stay off Iceland altogether. Apart from that, he made a good speech.

This is a nice opportunity to take part in one of the three-monthly contests between Eurosceptics and Euro-enthusiasts on which we spend so much time in
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this House. It is nice to welcome two new Ministers in the field as umpires or referees in the contest—my congratulations to both of them. I shall not put forward a view that accords with their policy or with official policy, because I shall not vote for this measure, and I would not want to give the impression that speeches by Labour Members will be, with one exception, that of my hon. Friend the Member for Luton, North (Kelvin Hopkins), panegyrics on Europe.

I am sorry that my hon. Friend the Member for Grantham and Stamford (Mr. Davies)—my new Friend—has left the Chamber, but it was good to see him get all that accumulated bile about the Conservative party off his chest. I am sure that it did him a lot of good. It was interesting to see, but I do not think that those views will do him as much good under our new leadership as they would have done under the previous leadership until July—the bid is a bit late.

The basic problem that we face with this Bill is that it adds to the costs of belonging to the European Union, which are already unacceptably high for this country. After Germany, which is much more generous and committed towards Europe, we have long been the second highest contributor. That situation has been compounded by the concessions made on the rebate by our previous Prime Minister, whose name slips my mind temporarily, earlier in the year without much consultation with Labour Members.

The rebate was negotiated wisely by Mrs. Thatcher, because it addressed some of the problems that the structures and financing of the European Union placed on this country unfairly and unequally. However, it was wrong to give up any part of that rebate, and in particular to do so without concessions in the negotiations in return. One should not just make generous impulsive offers and throw all one’s cards on the table

Europe is a matter of continuous negotiation, albeit a rather annoying and embittering one. In the negotiation, one must play one’s cards and games in return for sacrifices. My concern is that there were no reciprocal gains and we got nothing in the negotiations, either on the treaty, which was also in play and being negotiated at the same time, or on the budget situation that has been so damaging to this country. Before those concessions, our contributions, which will increase under this Bill, were between £7 billion and £8 billion gross over the past few years.

David Taylor (North-West Leicestershire) (Lab/Co-op): The previous Prime Minister, when negotiating rebate reform, stated that European partners had arrived at a quid pro quo in respect of CAP reform. Just weeks later, the then President Chirac said to French farmers that the CAP was safe and unchangeable until 2020. Does my hon. Friend think that that quid pro quo is likely to be delivered any time soon?

Mr. Mitchell: The so-called concession on the CAP was not worth the paper that it was not written on. Our experience of the CAP indicates the difficulty. The new settlement will be in 2013, but I do not imagine that we shall get any substantial concessions from the French. Indeed, this reminds me very much of the Berlin negotiations on Agenda 2000, when some concessions had been made on the CAP but then in marched President Chirac who cancelled the whole lot and took
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them back. This issue has been impossible to address. Every party in this country has promised at every election a fundamental reform of the CAP, but we have not got one.

My hon. Friend the Member for Grantham and Stamford said that the negotiations have set the CAP expenditure on a remorseless downward path, but that is nonsense. It has been reducing as a proportion, but it has been increasing as a total, and it still represents well over half the annual EU budget going to 5 per cent. of the EU electorate. That goes to show what the EU’s preoccupations are, so he was wrong to say that there has been a concession.

David Taylor: I am not even sure that the trend is downwards. The overall proportion of allocated expenditure that the CAP took in 2006 was 46.7 per cent and in 2005 it was 46.2 per cent. It is floating up slightly, not floating down as my hon. Friend—perhaps inadvertently—suggested.

Mr. Mitchell: My hon. Friend is a fount of wisdom and sagacity, and I am always delighted to be corrected on any issue that is damaging to the European Union. So the trend is up for the proportion now, although it had been heading down for some time. Anyway, the CAP is very boring and I want to move on—

Stewart Hosie (Dundee, East) (SNP): The hon. Gentleman mentions the CAP. There is no question but that it needs reform and we all have our own issues with it, but at 0.4 per cent.—less than half a per cent.—it has provided secure food supplies for decades in Europe. It has also, to some extent, been a social tool to protect the most fragile economies in some of the most remote and rural areas. We all want to see changes in the subsidies for big agro-business, but what other changes would the hon. Gentleman make that might weaken or damage the good things that the CAP has delivered for many decades for a small proportion of Europe’s income?

Mr. Mitchell: I do not want to make changes: I just want to scrap it. That would be the sensible thing to do, because then we could support our own agriculture in our own way. That is enough for now on the CAP, but the key point is that it is a massive budgetary contribution to a small section of the European economy.

Before the changes proposed in this Bill, our gross contribution to Europe over the past few years was between £7 billion and £8 billion a year, and our net receipt—the money that the EU graciously gives us back—was between £3 billion and £4 billion a year. That is our money with their costs deducted to spend on purposes that they see fit. It annoys me, as it does my hon. Friend the Member for Luton, North, to see on every dogs’ home or retirement home for eurocrats the sign with the stars saying that it was built with European money. It was not built with European money, because it is our money that we have been given back, with their costs deducted. We could spend all that money for our own purposes much more effectively—and certainly not on the CAP.

Mr. MacNeil: In some ways, I agree with the hon. Gentleman. Indeed, if one looks further north—latitude may have something to do with it—Norway and Iceland spend more money per capita supporting
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their own agriculture to ensure a secure food supply than do EU members. A secure food supply is not dependent on the existence of the CAP.

Mr. Mitchell: Yes, and I am grateful to the hon. Gentleman for making that point.

The Bill will increase our gross contribution to £10 billion—which will rise to some £20 billion after 2013—and the net receipt to £6 billion. I ask those hon. Members who say what a benefit the system is to the rest of Europe to envisage how many roads, schools, hospitals and health centres could be built here, at our discretion and for our purposes, if we were not making that annual contribution. We are told to rejoice that Italy and France are now beginning to pay something after all the years of paying nothing, but the proportionate increase in their contribution is less than in ours, and we have been making the second highest contribution.

Our Government’s contribution is about 0.5 per cent. of our GDP, and that is important, because that is the growth from which the people of this country benefit, but it is not our only contribution to Europe. We also make contributions to European institutions of £1.8 billion in total, including for instance the blessings of the Galileo project, which is to send 20 flying pigs into space to bounce back a location system that we get free from the Americans at the moment, so that our motorists and defence forces can pay for it. I come back to the CAP—I am sure that the hon. Member for Dundee, East (Stewart Hosie) will rejoice. The net cost of the CAP to us, by the OECD’s estimate, is £15 billion a year. That is partly in distortions to the market, but it is also the cost of not buying the cheaper food that is available on world markets, and being forced to buy the overpriced production from Europe. What could we do with that £15 billion?

Then there is the cost of the European regulations that are showered on us, some necessary and some not. Estimates vary and some are higher than others, but let us say £25 billion a year. Add that lot up and we are contributing between £45 billion and £60 billion a year to belong to that institution. It is some 2 per cent. of GDP, so in other words our growth would have been 2 per cent. faster each year had we not been making those contributions. That growth is cumulative, so at the end of 10 years our economy would have been that much more powerful—and that much better able to contribute to the needs of developing countries.

Cumulative growth has been lost, and that is a burden that has been assumed without asking the British people, and it is also a loss across the exchanges. We are in a substantial and growing balance of payments deficit, and we are adding to that by the flow across the exchanges. We have already suffered damage to manufacturing in this country. When we joined, we had a surplus in manufacturing trade with Europe. Now we have a steadily growing annual deficit. We have paid for that in previous years through a surplus with the rest of the world, but that has now gone, too. There is a massive drain on the balance of payments, which will only get worse if we carry on this course.

Where has all that money gone? Where does the £45 billion to £60 billion go? My right hon. Friend the Member for Rotherham (Mr. MacShane), who is working
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hard for his European knighthood or whatever will come at the end of his long travails, said that it was going to help the Poles. Well, that is a wonderful purpose, and I am glad to help the Poles. I do not mind them: in fact, I quite like them coming here to help us, because our contribution does not keep them there. But what right has my right hon. Friend, or any other of my right hon. and hon. Friends, to be so generous with our money for those purposes?

Where has the money gone? It cannot all have gone to pay Mrs. Cresson’s dentist the massive sums that he was receiving for advising in her office. It cannot all have gone on corruption, which adds 10 per cent. to so many budgets—all of them unqualified. My new hon. Friend the Member for Grantham and Stamford was quite wrong to say that it was not the Commission’s spending, because it is the programmes that the corruption occurs in, and Europe is responsible for those programmes. Is the money going to the Spanish, to build fishing vessels to come and catch our fish and take it off to Spain? Is it going to farmers in the Republic of Ireland and France? I am sure that they do better out of the CAP and the aid than do the Poles, who are the poorest in Europe. Where is our money going and what benefit do we get from it?

Daniel Kawczynski: The hon. Gentleman makes an important point about the amount of money that will flow out of our country to eastern Europe. Is he aware that the debts of some countries in eastern Europe, such as Poland, are nothing like the national debt of this country, which is more than £700 billion and rising? So it is nonsensical for our British taxpayers to give Poland money when our national debt is increasing at a much faster rate than its is.

Mr. Mitchell: If I accepted that specious point I should be criticising my leader and I would never ever do that. Let us say that there is a contribution across the exchanges rather than an assessment of the budgetary position.

What benefits do we get? There is a mantra. The Government and Euro-enthusiasts always tell us that inestimable benefits flow from Europe. They say inestimable, as a reason for not estimating them. Year after year I have tabled questions asking for a balance sheet of the gains and losses of our membership of the EU. Lord Pearson, who represents the provisional wing of the UK Independence party in the House of Lords, tables an annual motion asking for a balance sheet, but we are never told what the benefits are.

We are told that many jobs are dependent on Europe. That is just not true; those jobs would exist whether we were in the EU or out of it. Exports and trade would continue.

Mr. MacNeil: It is argued that one of the benefits of EU membership involves fiscal transfers. Does the hon. Gentleman agree that there may also be many inestimable benefits to the European economic area, witness Iceland, Norway and Switzerland?

Mr. Mitchell: The countries that have done best economically are outside the European Union, especially smaller countries such as Switzerland and Iceland. They do not have to bear the EU’s burdens, so they have had much faster growth than us. EU growth has been laggard.

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