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There are many things that we want to do to encourage local skills and research and development, and local businesses, but were not able to do because of the existing rules.
So when, under the new clause, the Government report back to the House on whether they have secured concessions, they can tell us whether they have secured the concession, at least for countries such as ours, on regional funds, so that we control that money and use it for British priorities, rather than sending it to Brussels and having it sent back by them, having incurred administrative costs and being earmarked for uses that would not necessarily be the priority of the British people and the British Government.
The former Prime Minister made the concessions that are incorporated in the Bill. At the time, the then Chancellor was leaking to the press that he did not really support that. He thought that Tony Blair was being unduly weak and giving away too much. Now is his chance. He is now Prime Minister and this is the great vision that he has been seeking to put before the British people. He can do what he indicated in leaks that he wanted to do and give his Back Benchers a free vote on this Bill. They will then put him in a strong position to renegotiate and get the sort of deal that he wanted.
I fear that we did not get that deal because the outgoing Prime Minister had other priorities. He was looking to his own future. He did not want to end with a big row in Europe. That might have been in Britains interests, but it would not have been in his. He made a concession, which was a big contribution to his own future campaign to be President of European undeclared contribution, which dwarfs those of any member of the present Cabinet. I hope that that mistake, that unfortunate policy and that unfortunate weakness of the previous Prime Minister can be put right.
Mr. Peter Bone (Wellingborough) (Con): I welcome the new clause, which has given the Government a get-out-of-jail card. I am sure that the Chief Secretary will accept it when we come to the end of the debate.
It was clear from what my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) said that the current Prime Minister made it clear that he disagreed with his predecessor on the deal. Since I entered the House, one thing that I have learned is that a small Bill with a few clauses that is being debated for a short time is a most important Bill, and the Government are trying to get something through the back door.
Mr. William Cash (Stone) (Con):
On the subject of the former Prime Minister and the current Prime Minister, does my hon. Friend think it more than likely
that the deal between them was that the outgoing Prime Minister would stand down, as shown in the recent programme The Blair Years, in return for the undertaking that the new Prime Minister would not oppose either the own resources decision or the European treaty, which we will debate next week?
Let me address the new clause. We are talking about something of enormous importance to British taxpayers. During the years that Mr. Blair was in power, the contribution to the EU made by British taxpayers, adjusted to todays value of the pound, was more than £100 billionenough money to run the health service free of charge for this year. We are talking about a change in the formula whereby the EC allocates its budget to individual countries. Each country has the right to debate that new way of raising funds, but I suspect that only this country will have reservations, because only this country is dealt such a bad deal by the formula.
The Chief Secretary was helpful in his opening statement and provided a lot of percentages, but he did not translate them into money. However, a written answer given in January 2006 set the record straight. It stated that in 2007, our net payments to the EU would be £4.7 billion, increasing to £6.8 billion by 2011an increase of 45 per cent. How can a £2.1 billion increase for British taxpayers be right when we are in the middle of an economic crisis that requires us to have almost a statutory pay limit in the public services?
Mr. Hayes: My hon. Friend has enlightened the House with those figures. They stand in stark contrast with the assurance that the Chief Secretary gave us from the Dispatch Box a few moments ago that our contribution will be some £5 billion across the economic cycle. Either my hon. Friend is wrong, or the Chief Secretary inadvertently misled the House. If the second is the case, the Chief Secretary had better stand up now and put it right.
I can only quote from the table in the written answer given by the hon. Member for Bury, South (Mr. Lewis). It clearly stated that in 2011, our net contribution would be in the range of £6 billion to £6.8 billion. I am sure that the Government were not wrong about that fact. Another interesting element of the written answer to which I have referred has to do with the so-called dodgy money that we get back from the EU. We give it £14 billion, and then some bureaucrat in Europe sends some of it back, with instructions about where it should be spent. I
remember driving around a small village in Wales and reading a blue plaque that stated that what amounted to a motorway had been built by the EU. Of course, there were no cars on it at all, but the Bill means that even the dodgy allocation of returned funds that I have described will be smaller. This year, we will get back £5.6 billion, but it is predicted that we will get only £4.2 billion in each year from 2011 to 2013. It cannot be in the national interest for us to pay substantially more money to the EU and yet get less money in return.
Andy Burnham: I shall try to answer the points raised in the debate on new clause 1, which talks about the outcome of the review. The heart of the matter is the point at which the certificate to be issued by the Treasury would be debated in the House. When I intervened on the shadow Chief Secretary, his answer summed up the problem with the new clause. He referred me to paragraph 80 of the Commission document, which talks about a White Paper or report to be issued in the relevant time frame, but that is not the same as the outcome of the review.
Andy Burnham: The hon. Gentleman shakes his head and laughs, but that is a very important point. The White Paper would set out strategic, high-level principles, but that is not what the outcome of the budget review would be. Therefore, the new clause is immediately defective in that specific regard.
Mr. Hammond: What the Minister has described does not make the new clause defective. Instead, it makes it much easier for him to accept the proposal, as all he is being asked to agree is that the Treasury should be required to certify that it
considers that the outcome of the review is satisfactory to the interests of the United Kingdom.
The condition referred to in subsection (2) is that the Treasury shall have laid before both Houses of Parliament a report on the review by the European Commission...including a certificate that the Treasury considers that the outcome of the review is satisfactory to the interests of the United Kingdom.
I repeat that the review does not conclude with the publication of the relevant White Paper. There is no possibility that the review could achieve its outcome before the House has been asked to ratify the own resources decision in January 2009, and that is why I contend that the new clause is defective.
The review will also be taken into account in the preparatory work on the following Financial Perspective.
I am sure that the hon. Member for Runnymede and Weybridge will accept that that is where work on the review will lead, but the logic of the new clause is that the outcome of the financial perspective being debated this evening should be held up until we have achieved a satisfactory outcome from the next financial perspective. The outcome of that review will inform the preparatory work for and the discussions on the next financial perspectivethe one that begins after 2013. I say again, essentially, he is asking us to hold up the current financial perspective covering 2007 to 2013, pending the outcome of all of the discussions. The amendment is defective. It would cause us to miss the ratification deadline, and on that basis, I urge hon. Members on both sides of the House to reject it.
The hon. Member for Twickenham (Dr. Cable) asked a fair question. He asked what would be the practical consequences of not ratifying: would there be serious consequences, or would the provisions of the current financial perspective simply be held up? Let me be plain: there is no formal sanctionno fine or formal proceedings that could be institutedbut implementation of the present financial perspective could be delayed. Backdating to the beginning of 2007 can happen only after ratification.
Andy Burnham: Let me finish the point. The other consequence is what one might call a diplomatic or political consequence. We have every reason to believe that 26 other member states will ratify the own resources decision into their domestic legislation, so we would face the prospect of being one versus 26 in explaining why we failed to ratify the decision. I do not want to over-dramatise by saying that not ratifying the decision will lead to a complete breakdown, but there would be real consequences to not meeting the ratification deadline.
Dr. Cable: If the Chief Secretary believes that the outcome can be assessed only at the end of 2008, why did the Prime Minister in his statement to the House last December specifically refer to the World Trade Organisation negotiations, which must be concluded within the next few months?
Andy Burnham: In his comments, the hon. Gentleman asked whether the effect of that review could be felt before 2013. The answer is that it could. The previous Prime Minister argued for that in securing the review. My point in response to the new clause is that the outcome of the review cannot possibly be known before the ratification deadline.
Andy Burnham: I will give way one last time to the shadow Chief Secretary, but I am trying to answer seriously the points that were put to me during the debate. There can be no hope that the outcome of the review will be known before the ratification deadline. I have pointed out that there will be consequences of being held to have acted in bad faith and being isolated, which is not what the Government want.
Mr. Hammond: The point that the Chief Secretary made earlier is that the outcome of the review is not the final, definitive stage in preparing the next financial perspective. We accept that. All we are asking for is some clear sign that our partners are taking seriously the obligation into which they apparently entered to have a fundamental review of the EU budget, and that the Treasury, on the basis of the outcome of that review, is satisfied with that decision. That is what we are asking the Treasury to certify.
Secondly, the right hon. Gentleman is quite wrong to say that the current financial perspective will be held up. The current financial perspective is agreed and already operational. The only question at issue is the own resources decision. We will fall back on the existing own resources decision if the Bill falls tonight.
Andy Burnham: I am disappointed that the hon. Gentleman did not let me finish my point. The Commission document says that there will be a fundamental, no-taboos review. That is what we secured. I have explained clearly why the new clause is utterly defective. It would leave this country totally isolated in Europe. I can only conclude that that is where he and his whole party want us to be.
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