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That the draft Payments into the Olympic Lottery Distribution Fund etc. Order 2007, which was laid before this House on 25th October, in the last Session of Parliament, be approved.
EUROPEAN COMMUNITIES (FINANCE) BILL (PROGRAMME) (NO. 2)
Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),
That the Order of 19th November 2007 (European Communities (Finance) Bill (Programme)) be varied as follows—
1. The following provisions shall have effect in place of paragraphs 3 and 4 of that Order.
2. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion—
(a) two hours after the commencement of proceedings on the Motion for this Order, or
(b) one hour before the moment of interruption,
whichever is the later.
3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion—
(a) three hours after the commencement of proceedings on the Motion for this Order, or
(b) at the moment of interruption,
whichever is the later. —[Mr. Blizzard.]
Question agreed to.
Orders of the Day
European Communities (Finance) Bill
[Sir Alan Haselhurst in the Chair]
Question proposed, That the clause stand part of the Bill.
6.16 pm
The Chief Secretary to the Treasury (Andy Burnham): I do not intend to delay the Committee for long, but I think that it is worth setting out the arguments that we went over at some length on Second Reading and the key points that constitute the own resources decision that the Bill will incorporate into UK law.
That decision was agreed more than two years ago, and it is fair to say that there has been considerable opportunity for Members on both sides of the House to form a view on it. It is now make your mind up time. This is not a Bill that we can go through line by line and take the bits that we like and remove the bits that Members may be less fond of. We have either to accept the package that was negotiated in December 2005 or signal a wish to go back and renegotiate it.
It is important to say at the outset that there may be seductive—
Mr. Peter Bone (Wellingborough) (Con): Surely if we reject the Bill tonight, the current system will stay in place and there will be no need for renegotiation?
Andy Burnham: In many ways, that betrays the problem with the Opposition’s logic. The hon. Gentleman suggests that it is possible for this country unilaterally to ignore the ratification deadline and just carry on as if nothing has happened, but that would trigger a major reassessment of our relationship with the European Union— [ Interruption. ] That might indeed be what he wants, as he confirms, but if that is his real objective, his time would be better spent focusing on the 15 days that will be devoted to the EU reform treaty on the Floor of the House. I guess that his diary is already clear for each and every one of those days.
That is the point. This is not a pick-and-mix opportunity. The sweet shop is not open; people cannot just take what they like and leave the rest. We will either accept the measure or we will not. Ingenious attempts to create a third way, as the Opposition new clause seeks to do, are simply unworkable and would lead to the situation that I outlined.
Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op):
Do the Chief Secretary and the Government intend consistently to tell us that when European Union proposals are put in front of us, we always have to either take them or leave them, and that if we are
unhappy with them in any way the only alternative is to throw into the melting pot our relationship with the European Union? That surely undermines the credibility of the idea that Britain is a partner that can argue its corner.
Andy Burnham: As my hon. Friend knows, there are ample opportunities to debate European business in the House, both in Committee and in the Chamber. The financial perspective was debated at some length following the Council meetings at which those matters were debated. The then Prime Minister came back to the House and debated those matters in this Chamber. The House has had plenty of opportunities to debate the precise shape of the own resources decision and whether to accept it. My point is factual. My hon. Friend will agree that we cannot now go back through the own resources decision and seek to insert amendments from this Committee— [ Interruption. ] There is an amendment; forgive me, it is a new clause. My point is that we will either accept the decision tonight or we will not.
Mr. Richard Shepherd (Aldridge-Brownhills) (Con): The Chief Secretary has forgotten the historical function of this House, which is to consent to the expenditure of money. That is the supply side of the question. It is not for the Government to assert that they can do something unless they have the consent of the House. That is the constitutional position. This is a debate. If the House has the courage and determination to say that the decision reflects an inadequate negotiation by the present Administration and by the previous Prime Minister, it has the right to reject it.
Andy Burnham: That is precisely the point; it is what I said at the start. Hon. Members on both sides of the Committee have the opportunity to express precisely that opinion this evening. The Committee has that ability, but we cannot go back and renegotiate the points contained in the own resources decision or put on hold the ratification of the decision pending the conclusion— [ Interruption. ]—I ask the hon. Member for Aldridge-Brownhills (Mr. Shepherd) to hear me out—pending the conclusion of the budget review that was also set in train—
Mr. Philip Hammond (Runnymede and Weybridge) (Con): On a point of order, Mr. Deputy Speaker. The Chief Secretary is suggesting that it will not be possible to insert new clause 1. If that were the case, surely the new clause would not have been selected this evening?
The Chairman of Ways and Means (Sir Alan Haselhurst): I can say to the hon. Gentleman that I have selected new clause 1 for debate and, if time allows, it will be debated.
While I am on my feet, and also on a point of order, perhaps I should remind hon. Members that we are sitting in Committee and that the appropriate form of address to the occupant of the Chair is not Mr. Deputy Speaker, but either Mr. Chairman or Sir Alan. I am perfectly happy with the former.
Andy Burnham:
Thank you, Sir Alan. I do not disagree with the point made by the shadow Chief Secretary. Of course, it is well within the rights of the
Committee to adopt the new clause. My point is that that would send the clearest of signals that the UK was unilaterally opting out of the own resources decision. The conclusion of the budget review process, which the new clause mentions, will take some time, I would guess. The date for the ratification—the agreed date by which all member states should incorporate the own resources decision into their domestic legislation—is 1 January 2009, which is less than a year away.
Mr. Shepherd: I am extremely grateful to the Chief Secretary for giving way again. There is a fundamental point. Sir John Major once went to Edinburgh and agreed certain finance arrangements, and it was claimed that the whole of Parliament was bound by the Prime Minister’s undertaking to European leaders. That cannot ever be the position. Parliament is the authority through which the decision is made. The Government have entered into an agreement, but whether they can honour it or not is entirely dependent on how the House responds.
Andy Burnham: The hon. Gentleman misunderstands me—wilfully, I believe. I tell him directly that the Committee and the House have the opportunity to reject the proposal this evening. That is his right as a Member of the House and it is the right of all hon. Members. My point was that we cannot go back and renegotiate the own resources decision line by line.
Mr. John Redwood (Wokingham) (Con): Given that the decision was negotiated some time ago, perhaps when the Government agreed to it they thought that they could afford to give away €10.5 billion of hard-pressed taxpayers’ money. However, they now cannot afford a decent pay rise, awarded by an independent commission, for the police and they are achieving record levels of borrowing and taxation. Should not the Chief Secretary reconsider, in order to be a prudent manager of our money?
Andy Burnham: As the right hon. Gentleman knows, a very prudent decision was taken to increase public expenditure at a lower rate than predicted levels of growth in the economy. That was the decision made in the recent spending review. The forecasts for the part of the financial perspective that covers the spending review take into account the projected figures. I ask him to consider the fact that the Government have taken prudent decisions within a tighter fiscal framework, overall.
Dr. Vincent Cable (Twickenham) (LD): Although the Liberal Democrat approach is different from that of the Conservatives, they are asking perfectly legitimate questions about parliamentary scrutiny. Will the Chief Secretary explain what would happen if the ratification deadline was not met by January 2009? Will he talk us through the nuclear option? What exactly will happen, legally and financially, if that deadline is not met?
Andy Burnham: I can probably do better. I refer the hon. Gentleman to paragraph 11 of the explanatory notes, which states:
“If any Member State fails to adopt the new Own Resources Decision by 31 December 2008 then the current Own Resources Decision...continues to operate until such time as the adoption process is completed”—
[ Interruption. ] Opposition Members have reacted, as someone said, as though that were a complete vindication of their position. Such an outcome—it is what Opposition Members want, although they are not saying so—would precipitate a complete breakdown in relationships with the rest of the European Union. I am led to believe—I shall return to the House to correct this if I am wrong—that this country has never failed to ratify an important decision agreed with European partners.
Let us be clear what Opposition Members want. They want that showdown debate with the European Union. If that is the case, they should come out and say so.
Stewart Hosie (Dundee, East) (SNP): I agree with the thrust of the Bill. I am a pro-European who wants to see the European Union work. I want the poorer parts of eastern and central Europe to benefit from objective funding like that from which we have benefited in the past, but I also want to see proper reporting of how the money in Europe is spent. I am not convinced that the review proposed in the new clause cannot be carried out in the year left before ratification is required. I do not want a showdown. I want proper information, and the Minister must be more convincing when he asserts that we cannot conduct the proposed review in a year. I do not think that anyone really believes that.
6.30 pm
Andy Burnham: The deal was agreed more than two years ago, and it is important that the UK honours its obligation to ratify it by the agreed deadline. The House has an opportunity today to debate the pros and cons of the agreement, and I have explained that every hon. Member has a right to accept or reject it. As for scrutiny, the hon. Gentleman will know that in response to the excellent report from the House of Lords, the Government have made a commitment to publish a consolidated statement on EU finances. He is right that the debate could benefit from greater transparency and accountability, and the Government have agreed to facilitate that.
However, it is an entirely different thing to say that a long debate should be held over the course of the next year. That would amount to an attempt to unpick the 2005 agreement, which was based on three pillars. The first pillar was expenditure, or the EU budget. The second was the own resources decision, which had to do with how those funds would be raised. The third element, for which this Government pressed very strongly, was the insistence that there should be a review of the entire budget process in future.
The documentation supporting the negotiation process makes it clear that nothing is agreed until everything is—in other words, that we cannot accept the bits of the negotiation that we like and reject the rest. That was how the negotiations were conducted, and it is not possible for us to go back and say, “We like this bit but we don’t like the rest.”
Rob Marris (Wolverhampton, South-West) (Lab): I am grateful to my right hon. Friend for his patience in explaining the process. It is clear that the House could choose to reject the treaty, with the result that the UK would have to renegotiate it. That would be unwise, in my opinion, but will he assist me by moving on to the substantive questions? How much will the treaty cost us, and on what will the money be spent? I understand that it will go towards funding enlargement. A third question concerns the treaty’s effect on duties on commodities, such as sugar, that are produced by non-member states. Given the EU’s system of external tariffs, that is an especially sensitive matter around the world.
Andy Burnham: I am grateful to my hon. Friend for his intervention and for his request that we move on to the detail of the own resources decision. That is what I intend to do.
Mr. Mike Hancock (Portsmouth, South) (LD): Earlier, the Chief Secretary said that the former Prime Minister brought the deal back to the House for debate and presumably a vote. Will the Chief Secretary remind the Committee of when that debate took place and of the result of the vote? The best that we managed was a statement from the former Prime Minister. We did not get a debate on this issue.
Andy Burnham: I seem to remember that the former Prime Minister came back to the House on more than one occasion—after the Council in June and again in December, once the decision was made. I accept that the latter occasion was after the event, but the debate on these matters after the June Council was very live and the House had an opportunity to influence events. I repeat that there was a vote on Second Reading, and hon. Members will have other chances in the votes to be held this evening to express their views as to whether they believe the agreement represents a good deal for Britain. I am not going to assert that it is, as all hon. Members must arrive at their own judgment. If they decide to reject a deal that was negotiated in good faith, however, they must bear in mind the damage that might be done to Britain’s interests in Europe.
Mr. Peter Lilley (Hitchin and Harpenden) (Con): I do not think that the Minister realises that the opposition expressed this evening by members of various parties would strengthen the Government’s hand. The rebate at the centre of the argument was won by Mrs. Thatcher because she was strong, and it was conceded by the former Prime Minister in the weak days of his dying regime. If the Minister were forced to go back to Brussels because this House did not accept the dilution of the rebate, his position in negotiations for a better deal would be very strong. Mrs. Thatcher was able to get what she wanted because she had the House behind her.
Andy Burnham:
I do not believe that that is how the previous Conservative Government conducted their European negotiations. The right hon. Gentleman will find that there was no showdown and that no macho statements were made. Much of what that Government did was very pragmatic, and that is the same for all Governments. Their approach was based on
compromise, with a view to achieving the best available solution. His memory of the period may be rather selective, as I do not believe that it is based on fact.
The deal under discussion preserves the basis of the Fontainebleau Council, at which it was decided that the UK would receive a rebate on all spending in the 15 countries that then made up the EU. The current deal retains that approach, with the difference that it takes account of enlargement and proposes a different financing mechanism for the enlarged EU.
The Conservative party says that it supports EU enlargement—
Andy Burnham: The right hon. Gentleman nods. Well, this is the decision that pays for EU enlargement. The Opposition cannot say that they support enlargement if they do not accept that it must have a financial cost.
Mr. Philip Hammond: Will the Minister explain how both the current and former Prime Ministers were able to say in May and June 2005, when the deal had been done and the EU had already been enlarged, that the UK rebate was fully justified and non-negotiable? That was their position as they went into the negotiations. They did not begin them saying, “If we want enlargement, we’ll have to give up the UK rebate.”
Andy Burnham: We went over this on Second Reading. The hon. Gentleman may not have understood that the own resources decision clearly preserves the basis of the rebate, as I have described. He does not want to acknowledge it, but the rebate’s value will rise as a result of the deal that has been reached. That sounds like a pretty healthy and decent outcome to me.
Mr. Bernard Jenkin (North Essex) (Con): Will the Minister give way?
Philip Davies (Shipley) (Con): Will the Minister give way?
Andy Burnham: I shall give way to the hon. Member for Shipley (Philip Davies), the leading light of the “Better Off Out” group.
Philip Davies: I am grateful, as no one on the Conservative Benches, let alone a Minister, has ever before described me as a leading light. The hon. Member for Wolverhampton, South-West (Rob Marris) urged the Minister to get to the crux of the matter, which is how much extra the Bill will cost the British taxpayer. Will he therefore make that cost explicit, and will he say why the British taxpayer should pay more money to an organisation whose accounts have not been signed off by the auditor for 13 years running because of all the fraud that goes on?
Andy Burnham: I am happy to acknowledge that the hon. Gentleman is a leading light and the intellectual driving force in the “Better Off Out” group—if that is not a contradiction in terms.
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