The
Chairman: Order. This debate is not about powers or
parties’ opinions. It is about the European budget, so we should
limit our comments to that,
please.
Mr.
Heathcoat-Amory: Yes, Mr. Sheridan, we will not
go back in history, except, perhaps, to lay to rest another Euro-myth
that was advanced by the hon. Member for Taunton on budgetary matters.
He said that the treaty of Lisbon would somehow bring reform and
economy, but it gives more powers in more policy areas to the EU. It
means that what we have before us is only the start of a bigger
budgetary transfer.
One of my
questions to the Minister is about whether the figures before us
anticipate in any way the additional expenditure that will be required
to administer those
additional responsibilities, obligations and powers in the European
Union budget. Again, it is a matter of regret that the Liberal
Democrats and the Labour party colluded in denying the British people a
vote on the issue in a referendum, but I will not pursue that line of
argument too far. Instead, I will return to the figures in the
documents. The payments
next year are to go up by 5.3 per cent. That is completely
unacceptable. As things stand, the commitments will go up by only 1.5
per cent, but as we have heard, that does not take account of the
obligation to spend much more on the European economic recovery plan,
which all member states and the Commission are committed to by a
decision of the European Council on 20 March 2009. Only half the
additional €5 billion for that recovery plan is committed this
year, and the rest is committed next year. If that commitment takes
place, it will take the extra commitment well over the limit, the
financial perspective ceiling.
The Minister
said that that is unacceptable, but he must tell us what he is going to
do about it. What offsetting cuts and economies to the European Union
budget will he demand if he is to ensure that we do not commit
ourselves to expenditure in excess of that ceiling? I am sure he will
say that it will all be negotiated, but he must raise his game. It is
no good leaving it all until the day, and he must tell us with
determination that he will not accept the additional expenditure, and
explain what he intends to do about it.
Everywhere we
look, there is an enormous spending dynamic in these figures. The
Minister told me that the big increase in our net contributions to the
EEC budget was because of enlargement, but that is simply not supported
by the facts. There are big inflation-busting increases in this budget.
That is the primary reason.
Let us take
decentralised agencies, which I would call quangos. Page 5 states that
where those agencies deal with freedom, security and justice, they are
to receive a 68.4 per cent. increase in their commitment appropriations
next year. At the back of the paper, starting on page 81, there is a
long list of these quangos and the extra money that they will receive.
The Institute for Gender Equality is in a start-up phase, so its
increase is fairly modest, but the European Railway Agency is
apparently to take on new tasks and will get a 44.8 per cent. increase
in its budget. I do not think that that will bring a 44 per cent.
improvement in the performance of our rail network, but that is where
the money is going.
The European
Agency for the Co-operation of Energy Regulators is still to be
created. It has not yet been approved, but it is budgeted for. We are
told that the European training foundation has reached cruising
speed—that is the phrase used. It is a cruising speed that
demands a 23.8 per cent. increase in its budget next year. There are
pages of these quangos and agencies, all of which are completely beyond
any kind of democratic recall. Most people in the country do not know
that they exist, but there they are, staffed and funded, and the
expenditure is going up.
We mentioned
pensions, and the Minister needs to explain why members of the
Commission are to receive an additional 53.3 per cent. in their total
pension expenditure next year. Then there is the category of
citizenship. On page 44 of the bundle, beside the heading
“Informing about European policy and better connecting with
citizens”, we learn that there is to be a 14.4 per
cent. increase in funding—it is only a small example, but it all
adds up. That is obviously a failure, because the average turnout in
the European Parliament elections was at an all-time low. If they
really want to connect with citizens, why do they not listen to the
referendum
results? Mr.
Borrow: I am a little puzzled, because obviously the
negotiations on the budget will involve the Council, at which the
Governments of the 27 member states are represented, so the UK will be
represented by the Labour Government, but the negotiations also include
the European Parliament, in which are represented all the parties
represented in the Committee this afternoon. Therefore, I would be
interested to hear what work the right hon. Gentleman’s party is
doing within the European Parliament to work with other parties there,
what conclusions they are coming to on the budget and how they can work
with other parties to put pressure on the Council to reach his
objectives.
Mr.
Heathcoat-Amory: I cannot speak for the European
Parliament, but I can say that, as an institution, it is always on the
side of more expenditure, and that is one of its systematic problems.
All the organisations and institutions in the EU always want to spend
more money, and the only countervailing pressure on them comes from
member state Governments. That is why it is important that the Minister
goes there with an absolute determination not to accede.
The
Conservative party now has a much greater chance of influencing the
outcome because we are now sitting with parties that actually believe
in less Europe and in constraining European expenditure. Instead of the
entirely fake division between the party of European Socialists and the
European People’s party, both of which wanted more powers and
more money, we will now be in an organisation with which we agree. In
conclusion, it is entirely wrong that, when we face cuts to important
budgets in this country, we are even contemplating an increase of any
sort in the money we send over to the EU. The Minister has not given us
the slightest indication of his determination to resist that. I look
forward to a slightly better response when he winds up the
debate. 6.18
pm
Ms
Keeble: I want to focus on two sections of the
budget—chapters 19 and 21—and press the Minister on what
the Government will be doing on those areas. I certainly recognise and
give complete credit to the UK Government’s role in those areas
of spending, because we have consistently argued for those areas of
spending to be properly focused, with efficiency and effectiveness, and
I urge my hon. Friend the Minister to continue in that vein.
I am concerned
about the chapter 91 spending, which relates to external relations and
covers a multitude of different areas, including some of the spending
on Asia. That is particularly important to the UK because it affects
the support for countries with which we have historical connections and
which we are particularly good at supporting. I urge my hon. Friend to
say what the Government are doing to ensure that the external relations
spending is more focused on poor countries,
rather than on some of the near neighbour spending, which some of our
European partners particularly enjoy and appreciate because they want
to keep their near neighbours out of their countries. That is sometimes
what a substantial amount of their ideas about development focuses
on. I
also ask the Minister in particular to ensure that the external
relations spending on the poorer countries is effective. Looking
through some of the detailed figures—I am sure that he will
correct me if I am wrong—I notice that, for example, support for
the rehabilitation and reconstruction of Afghanistan is included in the
budget, and in 2008 there was an under-spend. If that is correct, what
pressure can he bring to bear to ensure that those areas of spending
that are important to us, which the Afghan spending is, are spent to
budget and spent effectively. I notice that some of the other areas of
spending that are not so pro-poor—perhaps less important in some
ways to the kind of things that I want to see the EU do—are
spent up to budget. I press the Minister to deal with that in the
discussions around the
budget. Secondly,
I am extremely concerned that ACP spending under chapter 21 has been
cut by some 16 per cent. The external relations funding is much the
bigger player in all of this, and that funding is being increased
slightly, but the ACP spending is being cut. I agree with some of the
things that the hon. Member for Taunton said. The EU is probably one of
the great ideological policy developments post-war, and has done more
to keep the peace and promote good relations and growth in Europe than
anything else we have seen. Its role in the wider world and in
supporting development assistance is also extremely
important. The
UK has been important in making arguments about the way in which the EU
should spend on development. But it is disconcerting that the external
relations budget is so much higher than the ACP spending, which is
€1.5 billion as opposed to the €4.1 billion for external
relations, and it has been cut by some 16 per cent. The ACP countries
are the ones that we, as a nation, have close historical links
with—Africa and the Caribbean—and I certainly want to see
the funding for them increased. It is unfortunate that we cannot
scrutinise the detail of the budget because it goes off to the European
development fund. I hope that my hon. Friend the Minister will increase
the pressure on the EU to improve the spending profile of the EDF, and
ensure that that money is released and spent, and that the mechanisms
for doing that are
improved. The
other point I want to make on chapter 21 spending, which I raised with
my hon. Friend the Minister earlier, and which I hope he will give more
details on later, concerns food security. It is interesting to see that
while the EU budget that goes into the ACP budget for pro-poor
development is under-spent, it looks as if the food facility has been
overspent, which is unusual, but perhaps in some ways not too
surprising, given the enormous food crisis in the developing countries.
Can the Minister say whether that is the case—that the food
facility is overspending—and if so, what will happen after 2010?
According to the huge bundle of papers that we have, which are
sometimes not user-friendly, the food facility is to be wound down. If
there is a such a need for it that it is overspending—if it is a
successful instrument for spending EU development
assistance—would it not be sensible to increase it and ensure
that we
put more money into that important area? I urge my hon. Friend, in case
he is tempted to repatriate this area of spending, not to do that. I
know that many Conservative MEPs would like that, but it would be a
catastrophe, because even though the EDF can be a bit unwieldy, with
application forms that are difficult to fill in, and it is not the most
effective organisation ever at spending its money, it is much better
than some member states. If the budget were to be repatriated there
would be an impact on developing countries. James
Duddridge (Rochford and Southend, East) (Con): I was
briefly a member of the Select Committee on International Development,
which recognised the problems of repatriation. However, instead of
repatriating money, or just giving it to the EDF, could not countries
that recognise that they have poor contributions contribute directly,
for example to DFID, rather than making a budgetary contribution
through the EU, which is pretty horrendous at delivering
aid?
Ms
Keeble: It is an interesting suggestion, but I doubt
whether Greece and Italy will give money to DFID.
[Interruption.] They do? I am astonished. On the
question of repatriation, as has been pointed out, if the money went
back to Italy and Greece it almost certainly would not go on
international development; it certainly would not go to
Africa—or it would go to north
Africa.
James
Duddridge: Just to clarify the matter; I was not saying
that Greece and Italy definitely do so, but certainly some member
states support direct funding through other countries’
organisations rather than going through the EU. It is a legitimate and
particularly interesting way
forward.
Ms
Keeble: One issue about its going through DFID would be
that DFID is a Government Department, whereas some other
countries—and the EU—have development money going through
an arm’s length agency. That is what the EDF is, which is partly
why we cannot scrutinise the budget. The virements go over to the EDF
and that is why all the details are not here. Perhaps the member states
in question do things that way, but if they were to spend through DFID
they would be making a contribution to our Government—to a
Government Department acting directly—which I think would be
constitutionally problematic for some
countries. The
hon. Gentleman is right about the need for some countries to consider
how to spend their development funding effectively and make sure that
it is pro-poor. That applies in particular to new member countries such
as Poland that do not have the historic institutions to be able to do
that, and for which paying into the EU is a quite sensible way to
organise the spending, albeit that we must ensure that that spending is
effective, and that all the money put in is
spent. I
want to ask my hon. Friend the Minister to press for several things.
First, will he press for more of the external relations budget, which
is very large at €4.1 billion, to go to pro-poor
development, to Asia rather than to some middle-income countries?
Secondly, will he press
for that budget, when it is there to be spent on pro-poor development,
actually to be spent? Thirdly, will he press for the ACP
spending—the chapter 21 spending, which basically goes off to
the EDF—to be increased, and for there not to be a 16 per cent.
overall cut? We may be strapped for cash, but that is nothing compared
with the situation of some of the ACP countries. Finally, will
he look again at the food facility and say what will happen to if after
2010? Since it obviously has been effective, and seems to have spent to
budget—and overspent—is there a way to make sure that
that important facility continues to deal with problems in developing
countries? 6.30
pm Ian
Pearson: I will try to respond to all the comments raised by hon.
Members in the
debate. Particularly
during the current difficult economic climate, it is right that the
Government in their negotiations on the budget both support the
economic recovery package that has been agreed in Europe as an
appropriate co-ordinated response to the economic crisis, and continue
to maintain their budget-disciplined approach and work with
like-minded member states to push a budget disciplinary agenda. We want
sufficient headroom under relevant spending ceilings to absorb spending
pressures, and we want reductions in line with spending capacity to
reduce budgetary underspend and reductions in areas that represent poor
value for money, including some agricultural market-related spending
and direct aids. We want to ensure that areas of the budget that
represent the best value added for the UK taxpayer, for example climate
change, security and jobs, receive sufficient funding, in line with
capacity, value for money and overall economic
conditions. Let
me start in the north, and journey downwards. The hon. Member for
Altrincham and Sale, West asked about the preliminary draft budget and
salary increases for Commission staff. I understand that the increase
proposed for 2010 is 1.2 per cent. The issue of pensions was also
raised. Although there is a sizeable increase in pensions for
members—the Commissioners, I gather—that is because there
is a new Commission this year, so it is time limited and a
one-off.
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