Annex 1: Extract from Debate on the Floor of the
House on 13 October 2010 on the draft EU Budget 2011[43]
Mr John Redwood (Wokingham) (Con):
Why does the Foreign Secretary seem to favour increasing expenditure
on the common External Action Service so that we have duplicated
embassies, with those at EU level undercutting our own and charging
us double?
Justine Greening: I have
no doubt that other Members will refer to that in their contributions.
As my right hon. Friend will be aware, we did not support the
setting up of the European External Action Service, but as it
is now in place our aim is to ensure that it does not duplicate
in the way that he says, and that instead it has a role that has
some value. We have been concerned about the increased budget
because when the EEAS was set up, a key aspect of the conditions
was that there would be fiscal neutrality and that is already
being challenged. That is one reason why we have been pressing
for that to be explicitly put into the terms of the EEAS remit.
We have been successful in that, and we are pressing Cathy Ashton
to make 10% savings immediately. Discussions on this are continuing
in the EU right now. My right hon. Friend is absolutely right,
therefore.
To make a broader point on the EU budget, it is vital
that decisions taken on budgeting are stuck to. There is an underlying
problem that I talked about in respect of implementation: in too
many projects there is a gap between what has been budgeted for
and what ends up being spent. It is quite a basic financial management
problem, but it needs to be addressed.
Turning to the background to today's debate and what
has happened so far, in August the Council adopted its first reading
position on the Commission's draft budget. We should bear in mind
that this draft budget proposed an increase of 6% in the 2011
budget. That first reading position saw the Council reduce the
budget level proposed by the Commission by €788 million in
commitment appropriations and by just over €3.5 billion in
payment appropriations. However, although the Council reduced
the payment levels in the Commission's proposal, the reductions
would still have meant an increase of almost 3% in EU budget spending
from 2010 to 2011. Also, although the Council's position was to
reduce spend in the administration budget by more than €160
million and to cut the total budget for the EU's regulatory agencies
by almost €12 million, even that would have left a rise in
administration of 2.5%.
I should remind the House that when we had the opportunity
in the European Parliament to vote against the rise in the Parliament's
2010 budget, we took it. Although the Council had battened down
the rise proposed by the Commission, the Government could not
accept the proposed level of budget increase and we therefore
voted against the Council's first reading. In fact, six other
member states joined us: our Nordic partners-Finland, Sweden and
Denmark; and the great brewing nations of Austria, the Netherlands
and the Czech Republic. The Council's position was, however, adopted
by a qualified majority, although I just remind the House that
we were very close to achieving a blocking minority on that vote;
we were just three votes away from doing so-we got 29 votes when
we needed 32. That is why we have been working so hard with our
European partners to put our case, because we want, at the minimum,
to be in a position to have a blocking minority. We really want
to aim for a majority, and that is what we are working towards.
I know that, as we have just heard, the European
Scrutiny Committee is considering the Council's first reading
position and the Commission's first amending letter. However,
I thought it would be helpful for Members taking part in this
debate to be given an outline of that developing position. I referred
to this briefly in response to my right hon. Friend the Member
for Wokingham (Mr Redwood), but I can say that more than 90% of
the 2011 budget for the EEAS is transferred from the existing
budgets of the Commission and Council. As he points out, an additional
€34.5 million is requested to fund new staff posts and other
start-up costs.
Overall, the proposal includes the following: first,
the establishment plan of more than 1,600 posts-this includes
100 newly created in 2010, and 18 requested for 2011, carrying
a remuneration cost of just under €19 million; secondly,
just over 2,000 other staff, 70 of whom are newly recruited this
year, costing an extra €2.5 million in 2011; thirdly, other
staff-related spending, of which less than €2 million would
be additional; and, fourthly, spending on buildings and other
operational spending amounting to just over €157 million,
less than €4 million of which would be additional.
The amending letter stated that cost-efficiency,
budget neutrality and efficient management should guide the EEAS,
and, as I said, it set a target of 10% efficiency savings in headquarters.
Although the Government acknowledge that some additional funding
is required in the EEAS's first full year, it is essential that
the EEAS demonstrates not only value for money, but budget discipline
in its funding bids and a firm commitment to substantial cost
efficiencies. It is vital that the aim of budget neutrality is
respected, so we are pushing for immediate cost savings and stressing
the importance of achieving cost efficiencies, including in decisions
over the EEAS's premises.
We have also pushed, thus far successfully, for the
Council to state on the record that the term "budget neutrality"
for the EEAS applies solely to the context of the EU budget. We
pressed for that so that we can counter unhelpful suggestions
from the Commission in the future that additional spending at
EU level could be offset by savings in member states' diplomatic
services. Such suggestions are completely unacceptable to the
UK.
Mr James Clappison (Hertsmere) (Con):
I am extremely heartened by the proposition that my hon. Friend
has put before the House this evening on this matter, but will
she examine this very carefully indeed? I know that the EEAS was
opposed by Conservative Members and is the legacy of those on
the other side of the House. As she would say, we are where we
are, but on this point of budget neutrality will she make it her
business to look carefully at any further proposals to increase
expenditure on the EEAS? Budget neutrality has already been breached
by the European Commission and it is likely that further attempts
will be made to breach it in future.
Justine Greening: I assure
my hon. Friend that we are looking across the piece to challenge
rises in all areas of the EU budget, including the EEAS. As he
points out, only months ago we were given an assurance that there
would be fiscal neutrality and that has already been broken. We
are challenging that and I believe we are doing so successfully.
I assure him that we are making our case very strongly within
the EU to challenge those sorts of spends when they are bad value
for money and when the money is spent in an unplanned way that
proposal that was signed up to. As he points out, that proposal
was signed up to by the Labour party when it was in government.
43 HC Deb, 13 October 2010, cols 412-15. Back
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