(HANSARD)in the first session of the fifty-fourth parliament of the united kingdom of great britain and northern ireland commencing on the eleventh day of may in the fifty-fourth year of the reign of
SIXTH VOLUME OF SESSION 2005–06 House of Lords

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Monday, 9 January 2006.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Exeter.

EU: Budget Reform

Lord Dykes asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Triesman): My Lords, the agreement reached at the European Council in December 2005 on EU funding for the period 2007–13 asks the Commission to undertake a full, wide-ranging review covering all aspects of EU spending, including the CAP, and of resources including the UK rebate, to report in 2008–09. That review will then be given consideration by the Council. The UK fully supports the review and is committed to ensuring that it delivers real reform of the EU budget.

Lord Dykes: My Lords, I thank the Minister for that detailed Answer, but was it none the less not a colossal mistake by HMG to go on in recent years about being the fourth richest country in the world, and at the same time to insist on our unique and long-standing rebate being fully maintained unless there was a considerable reduction in agricultural support for the eight new central European members? How will the Government now repair the damage with those countries, as there is still smouldering resentment about what happened in those negotiations, which did not go very well all the way through the six-month period? What will now be
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done? What will the Government's attitude be to those countries? What other things can HMG offer on a bilateral basis?

Lord Triesman: My Lords, I regret so early in the new year to disagree so profoundly with the comment that has been made, but the fact was that there was a very tough negotiation, with 27 different countries, each with our own interests, and pursuing those interests with a great deal of vigour.

We should look at what the Prime Ministers of those countries have said. The Hungarian Prime Minister said that it was an EU success, which he attributed to the United Kingdom. The Czech Prime Minister said that it was a worthwhile proposal that would bring big money to his republic. The Slovak Prime Minister said the result was better than he had hoped for. I could run through the lot, but I shall not.

Noble Lords: Oh!

Lord Triesman: I shall not, despite the encouragement. What I do say is that, for a group of aggrieved people, they seem in remarkably perky spirits.

Lord Hannay of Chiswick: My Lords, what steps will the Government take to ensure that when the review is conducted by the Commission, the Commission does not on this occasion smother the radical and interesting ideas that were put forward on the last occasion by Professor Sapir, which never got to the table of the Council at all? Does the noble Lord agree that it really is important to get a wide debate going, well ahead of 2008, about not only reforming the CAP, but finding ways through co-financing to reduce the burden that the CAP puts on the budget?

Lord Triesman: My Lords, I strongly agree that the earlier the debate gets going, the better it will be. Co-financing is one of the options that needs thorough discussion and must be examined as part of the review.
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If co-financing were to be introduced, it would have to be done in a way that ensured there was no increase in the total public spending in the EU—that is, of the EU plus the national budgets—and any move towards co-financing should also not stand in the way of further reform. That reform is plainly necessary, and all these ideas must be explored.

Lord Howell of Guildford: My Lords, continuing the spirit of new year agreement, would the Minister agree—as I think most people would—that the last six months of the British presidency was a sadly missed opportunity to get hold of serious reform of the budget? Under the new deal agreed before Christmas, which the Minister has already mentioned, the UK will pay the EU an average of £10.5 billion a year—that is even after the reduced rate—and then it will get back £4.5 billion a year in EU spending, so the average net contribution between now and 2013 will be an increase each year of £2.5 billion above what we were paying before. Is that right and, if so, what cuts in public services will we make to meet that sum?

Lord Triesman: My Lords, I anticipate no cuts in public spending at all. There has always been provision—the provision can be reflected in the fiscal statements made by the Chancellor—for the costs of enlargement. These were never going to be inexpensive. The UK's net contribution will increase by 63 per cent over the 2007–13 period, compared with 2000–06; that is the cost of enlargement. But all the wealthy countries are contributing. France's net contribution, for example, will go up by 124 per cent, Italy's will increase by 126 per cent. All of them see the benefits of a massively enlarged European Union and market.

Lord Marsh: My Lords—

Lord Barnett: My Lords, does my noble friend accept—

Lord Marsh: Happy new year.

Lord Barnett: Happy new year to you as well. Does my noble friend accept that it would be realistic to recognise that when there are 27 member states, the chance of getting an agreement on anything is pretty remote, particularly in relation to the budget? Is he prepared to say that our policy basically would also be realistic in recognising that we will need to compromise on almost any deal that is possible?

Lord Triesman: My Lords, that is the very nature of negotiations. As I said, negotiating with 27 players was always going to be a difficult matter. May I draw the House's attention to the fact that two of the four financial perspectives that have been agreed have been agreed under United Kingdom presidencies after very long negotiations with European partners, whatever the size of the European Union? We have benefited in that we have been prepared to open our markets and
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do the deals which go alongside enlargement without some of the fears that you see expressed elsewhere. It is hard to find a Paris newspaper that does not express deep alarm at the presence of a Polish plumber. We do not experience that difficulty in reaching agreements with our partners.

Lord Blackwell: My Lords, will the Minister confirm that until December the policy of the Government was to seek to redistribute structural funds from the richer countries to the poorer countries rather than to increase the budget and increase contributions? Is that still the case and is the Minister satisfied with the December outcome?

Lord Triesman: My Lords, we said very early on in the negotiations that we were looking for a 1 per cent budget. We ended up with a 1.04 per cent budget. That largely accounts for the additional money. That was considerably below the Luxembourg proposal and very much below the European Commissioners' proposal. What we are seeing is a fair balance at the end of a negotiation. Of course, it is not the same figure as at the beginning of a negotiation and, of course, the discussions were tough—that is the nature of negotiation. People strike positions, they argue about them and they get an outcome.

First World War: Pardons

2.44 pm

Lord Dubs asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Drayson): My Lords, when he was Minister of State for the Armed Forces, Dr John Reid undertook a very careful and thorough review of the execution of soldiers during the First World War. He concluded that, regrettably, so long after the events, the evidence which survives on the individual cases does not provide a sufficient basis for the Secretary of State to recommend a pardon for most, and possibly all, of these men.

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