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Actually, we do not know, because there is much more in the public expenditure review. In table C.1 on page 189, we are told that the gross GNI contribution—everyone knows what GNI is, of course—is £8.685 billion, this time not in accrued money but still in billions. We are told that there is a UK abatement of £3.675 billion, so we get to the same figure for 2007-08 of £5.01 billion. That, then, is the net contribution. But is it? We are told in the notes on the same page that some of the money is in one particular kind of expenditure and some in another. I declare an interest: I have used all the terms in those notes in my time in preparing budgets, presumably even a European Union budget figure. We are told that there is even one possibility that some of the money is in real cash terms, but then we are told that the TME effect of EU membership is given by GNI-based contributions, less the UK’s abatement—less an amount in respect of the cost of collecting TORs. Of course, we all know what that is—I see the noble Baroness does. It means total managed expenditure, and then by the traditional own resources. Therefore, we now know what the net EC contribution is.
I regret to say that we do not because in addition to the pages I have quoted there are another 17 pages of the Comprehensive Spending Review which tell us about our net contribution to the European Community budget. Can my noble friend give an assurance that in future he will present our net cost to the European Community budget in terms that might even please the noble Lord, Lord Waddington. I will not refer to the noble Lord, Lord Pearson. I would not expect him to be pleased about it at all.
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Lord Pearson of Rannoch: My Lords, does the noble Lord agree that it would be helpful if the Minister set forth the gross as well as the net contributions because it is the gross contributions that we pay, out of which Brussels is graciously pleased to send back some billions on projects designed to improve its own image, which we would not necessarily spend if we were not in this frightful racket?
Lord Barnett: My Lords, I am not sure that there is anything at all I can say that would enable the noble Lord, Lord Pearson, to agree with any single figure in the European Union budget because he wants us out of the EU altogether. I respect his view but it is not one with which I agree.
All I ask of my noble friend is that he will try to give an assurance that, in future, he will present these figures in the Comprehensive Spending Review and in the annual expenditure round in terms that the noble Lord, Lord Pearson, can understand even if he does not agree with them. Despite my criticism of the way the expenditure is given to us, I remain convinced about the benefits of our membership of the European Union. The advantages are enormous. Certainly, I hope that the Conservative Party will not go as far as the noble Lord, Lord Pearson, would like because it would be to the enormous disadvantage of the United Kingdom. What it tells me is that a referendum on such complex issues as the way the money is obtained and spent would be nonsense. It is difficult enough for us in Parliament to understand. Some of us think that we have an idea about raising revenue, but the idea that the average man or woman—readers of the Sun or even the Times—would remotely comprehend whether to say yes or no in a referendum is nonsense.
7.53 pm
Lord Pearson of Rannoch: My Lords, my noble friend Lord Waddington has already done a magnificent job of exposing the history and folly of our increased contributions to Brussels. I imagine that my noble friends Lord Stoddart and Lady Noakes will continue the good work and I would not like to queer their pitch. Therefore, I hope it will be helpful to place the Bill against the broader economic background of our EU membership, which is even more expensive and destructive of this country’s future. It is because of that background, as well as because of our cash contributions, that we should not pass the Bill tonight.
I remain astonished at the continuing inability of our political class to grasp a simple fact: our trade with our clients in the European Union is separate from our membership. The two things are different, and the former does not depend on the latter. Our politicians, bureaucrats and most of our political media seem to believe that our trade with the EU, and the three million or so jobs that depend on it, would be lost if we left the political construct of the Treaties of Rome and continued in free trade and friendly collaboration with our neighbours in Europe. I can only assume that they continue to believe that because
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That common commercial sense contains several hard facts that no amount of dreaming will dispel. The first hard fact is that the EU’s average external tariff, supported by the World Trade Organisation, has now fallen to below 1 per cent. That makes the single market somewhat redundant anyway. Then there is the fact that our EU partners sell us more than we sell them, so they need our trade more than we need theirs. We are in fact their largest customer, taking some 18 per cent of all EU exports. The United States of America comes second, with 16 per cent. Therefore, whatever happens politically, that trade would not be lost and nor would the jobs that depend on it. The jobs depend on the trade, not on our EU membership.
Our position would therefore be stronger than that of Norway and Switzerland, for example, neither of which is in the EU but both of which export more per capita to it than we do. That fact alone surely confirms that EU membership is irrelevant to a healthy trading relationship with the single market. It is no good the Minister and your Europhile Lordships replying that Switzerland is smaller than us and therefore what goes for Switzerland would not go for us. I am afraid that is nonsense and that the reverse is obviously true. The Swiss economy is similar to ours in many ways, but we are roughly 10 times its size and, as I have said, we are the EU’s largest client, so we could easily agree at least as good a free trade deal as that enjoyed by Switzerland.
In parenthesis, the Swiss Federal Government have helpfully gone further and estimated that full EU membership would cost Switzerland nearly nine times as much in budgetary contributions as its present bilateral trading arrangements—or some 4,940 million Swiss Francs versus 557 million Swiss Francs. A similar study here would no doubt come up with the same sort of picture and reveal the many billions that our EU membership costs us more than a simple free trade agreement with the single market.
Talking of free trade, Written Answers to me on 16 January reveal that the EU already has free trade agreements with Chile, Mexico, South Africa, Liechtenstein and Iceland, as well as Norway and Switzerland. It is negotiating free trade agreements with a further 42 countries. Why not us? Why is it that none of these countries, nor most of the other countries in the world, feels the need to join the EU? The answer is that membership is cripplingly expensive and wasteful and removes the right of its members to govern themselves. The latter disadvantage is beyond the scope of this debate but no doubt we will return to it when we come to debate the proposed Lisbon constitution.
It is not only British Eurosceptics who are saying that EU membership brings no economic advantage. The leading French think-tank, the Conseil d’Analyse Economique, which reports to the French Prime
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such as was seen in North America after the North American Free Trade Agreement was signed in 1989—
- “has been observed since the Single Act entered into effect in 1993, nor since the euro was introduced in 1999. The price convergence which EU monetary union was supposed to bring also did not occur, and convergence even came to a standstill in 1999 ... The authors believe that these problems may largely be attributed to the EU’s institutional shortcomings ... Economic integration has stagnated and no longer promotes growth”.
Since it is a semi-official French Government report, it goes on to recommend that the cure is even more Europe, and more economic integration and deepening from Brussels. So it gets the solution wrong, but the analysis of the status quo remains depressingly accurate.
I am aware that the Government are fond of quoting a rather different analysis from the Commission, entitled, Steps Towards a Deeper Economic Integration, which claims that the single market has created 2.5 million jobs across the EU and boosted prosperity by €225 billion in 2006. If the Minister is going to produce those figures again this evening, will he pause and consider the €660 billion which the EU competition commissioner, Verheugen, estimates is wasted on EU overregulation and red tape? Does that not make the EU economies some €435 billion worse off, even on the Eurocrats’ own figures, or around 4 per cent of GDP? I look forward to the Minister’s comments.
It is a continuing national scandal that the Government refuse to sanction an official cost-benefit analysis of our EU membership. In the absence of such an exercise, the several private academic studies which have been carried out put the cost of our membership, including our cash contributions, at anything between 4 and 10 per cent of GDP. The reason for the Government’s refusal to commission an analysis can be only that they know that the result would make the British people very angry indeed. Our membership of the European Union costs millions of jobs.
I suppose that that is why the Government invent all sorts of other justifications for the project of European integration. They say that, as part of the EU, we can better fight climate change, which is a pointless exercise. They say that we can deal with international drug-trafficking and terrorism, and generally promote peace and goodwill in our time. I fear that I am again straying into constitutional rather than economic territory, so suffice it to say that this is all make-believe. We would have much more and better influence as an independent sovereign state in all these areas than we do as a minority player in the EU.
I return to the hard cash that we hand over to Brussels. Thanks to this Government’s cowardly failure to hold on to the rebate secured by my noble friend Lady Thatcher, I gather that the amount is set to rise to some £25 billion gross by 2012, and £12 billion net. The figures start to escalate fast in
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I conclude by reminding your Lordships that we are talking about wasting an awful lot of taxpayers’ money. A mere £1 billion equips and staffs a decent-sized district hospital indefinitely, as I have pointed out to your Lordships previously. The figure cited by my noble friend Lord Waddington only built the hospital; my figure builds it, equips it and staffs it indefinitely. We should look at the gross, not the net, figures, after Brussels has been graciously pleased to give back some of our money to spend on projects designed to improve its own wretched image.
I remind your Lordships, too, that we are handing over these huge sums to an organisation which is institutionally and hopelessly wasteful and corrupt. It is therefore wholly unworthy of our support. Its own internal auditors have refused to sign off its accounts for 13 years. It employed its first qualified chief accountant in 2002, in the shape of Mrs Marta Andreasen, after the scandal-ridden Commission had been forced to resign. It then sacked her when she refused to sign the first set of unaccountable accounts which were put in front of her. The EU’s Civil Service tribunal naturally found against her in November, parroting the Commission’s case. She is a brave and thoroughly decent woman, and she will now appeal to the EU’s Court of First Instance. I trust that we all wish her luck and justice. For years, nobody would employ her because they did not want to offend the beast in Brussels, but I am proud to say that she has recently agreed to become the UK Independence Party’s treasurer. My party at least will be kept on the straight and narrow.
That is more than can be said for the European Union, to which we should not give another penny until its accounts are fairly audited. We should reject the Bill and spend the money which goes with it on better purposes of our own.
8.05 pm
Lord Stoddart of Swindon: My Lords, I think that it is pretty well known that, as far as I am concerned, we should never have joined the Common Market and it would be in the best interests of our country to leave the European Union. I always make that declaration so that people know exactly where I am coming from.
The Bill is a money Bill. Therefore, this House can have no effect on it at all. It can pass amendments, but they will mean absolutely nothing. It can reject the Bill if it wishes, but the Bill will still go through the House of Commons after a month and receive Royal Assent.
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I am sure that we are all obliged to the noble Lord, Lord Waddington, for tracing the history of where we came from to get to the settlement that we are discussing. It is an interesting settlement, but worse than the one that we could have achieved if the then Prime Minister had held to his beliefs. Unfortunately, he did not, so we are paying more than we otherwise would have done. We should also be grateful to the noble Lord, Lord Barnett, who has obviously done a great deal of work on this and has shown how difficult it is to arrive at a correct figure. A bewildering array of statistics has to be gone into. One wonders whether there is a deliberate plan to obscure exactly what the British taxpayers are paying.
As far as I can see, the gross contribution per annum is some £14 billion. After the rebate, that comes down to, at present, £5.5 billion per annum. That sum will rise, by 2011, to £6.5 billion net per annum. As the noble Lord, Lord Pearson, pointed out, it is the £14 billion figure that is important, because that is what taxpayers pay. The money coming back does not come back to the taxpayer. It comes back to individuals, such as individual farmers—people like the Duke of Westminster—to agricultural businesses, and so on. Make no mistake: the taxpayer is in for a big sum, which is much larger than the net figure so often quoted. Money goes to local authorities but again, as has been pointed out, not to projects that would get first priority from local government itself; it goes to projects that are forced on them, in many cases by the European Commission.
It goes even further. There are other projects that are not included—at least, as I understand it—in these figures but that place an extra burden on taxpayers. I do not think that the Galileo programme, for example, is included in this gross figure; it is additional. We also pay one-third of our aid budget to the EU, which then inefficiently administers it and sends it to irrelevant places. It does not go where the British people would like it to go—to Africa, in particular. We are paying out a lot of money as taxpayers.
I read the debate in the House of Commons. The Ministers there kept saying that this annual tribute is worth while because 57 per cent of our trade is with Europe. At least, the Minister opening the debate said 57 per cent, but by the time the Minister closing the debate spoke the figure had been reduced to 55 per cent. In either event, whether 55 or 57 per cent of our trade is with Europe, we trade with Europe in permanent deficit. Indeed, the latest annual figure is a deficit of £38 billion, which is the great majority of our total overseas deficit with the countries of the world. Since 1973, the accumulated deficit on trade amounts to some £350 billion. Incidentally, our gross contribution since joining is £213 billion. Even the net contribution amounts to £66 billion.
I have never been able to understand why British taxpayers have to pay this large annual tribute to trade with the European Union. We do not have to
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The future lies with countries such as China and India, not with the EU. Indeed, restrictive practices and overregulation by the EU make it more difficult to trade with third countries than it needs to be. The European Union is increasingly interested in the nooks and crannies of British life. For example, the European Parliament now wants to ban patio heaters, as if that is anything to do with this great European Union. I point out that it has been said that these patio heaters contribute less to global warming than the European Parliament does in moving backwards and forwards from Brussels to Strasbourg every so often. Why do we have to have this interference from the institutions of the European Union?
I also noticed in the Commons debate that some MPs seem happy for British taxpayers’ billions to be used to subsidise other countries. However, I guess that the majority of British people believe that charity begins at home and that the annual tribute paid to the European Union, much of which is badly directed or fraudulently converted, would be better spent in the United Kingdom on things such as those referred to by the noble Lord, Lord Waddington. I could add to that list reducing child poverty, increasing the state pension, putting more police on the streets and carrying out many other projects to improve social well-being and the decrepit infrastructure that we now enjoy—or, rather, suffer from—in this country.
The truth is that the issue is not about trade but about being part of a European empire—apparently including Russia, the Middle East and north Africa, according to the Foreign Secretary’s speech of 15 November. He might not believe that a superstate will be created, but a reading of the Lisbon treaty convinces me that that really is the aim. However, that is a matter for big debate later, when this House comes to scrutinise the Lisbon treaty. In the mean time, unfortunately, we have to pass this awful Bill.
8.16 pm
Lord Dykes: My Lords, this important Bill was brought to your Lordships’ House on 16 January, the day after its remaining stages in the Committee of the Whole House in the other place, which is normal for treaty-type Bills, and Third Reading. But the Bill is not just important; it is essential to fulfil the European Council agreement between the sovereign member Governments of the member states, which was concluded to make an adjustment.
As we know, the adjustment gives effect to the Council decision of 7 June last year on the own resources change and the complex new formula for the replacement mechanism. I am grateful to the noble Lord, Lord Barnett, for his exegesis of these
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Although the debates in the other place gave rise to the usual semi-hysteria from certain Members—only a small number—about these wicked EU treaties constantly sapping the very life-blood from the heroic but embattled Britannia, they also brought out the need to exercise proper scrutiny of complicated new measures, which by their very nature are hard to follow even for the cognoscenti. This Parliament rightly prides itself on a robust and proper system of scrutiny of all EU legislative instruments. We sometimes in this House make a little too much fuss regarding communications which are, after all, not legislation, but policy assertions. In this case there was an understandable anxiety in the Commons that there was not enough time for a review of these new spending modalities and the budget implications for the UK of the new treaty arrangements and the EU budget, as it would be.
However, broadly the Government were right to remind the other place that the consequences of not agreeing to ratify this legislation would be to throw open the whole system and go back to the previous formula. Furthermore, scrutiny does not and should never mean scrutiny to oppose a measure. It is also vital to inform and explain to Members of Parliament in both Houses and the public and sometimes to improve legislation as it goes through each member state. I always contrast in both Houses the extreme speed with which most other major treaties on our membership of other international organisations are understandably passed on the nod in this Parliament, basically because everyone automatically agrees that they are a good thing. People feel that there is no need for a lengthy debate.
In this case, a small, noisy and eccentric minority of Members dislike intensely, indeed hate—that is not too strong a word—our membership of the European Union. I agreed with much of what the noble Lords, Lord Stoddart and Lord Pearson, said about some of the budget and trade figures, but the noble Lords confirmed yet again their wish for us to leave the Union. But there are probably 50 to 100 good reasons for our membership, and the budget calculation is only one aspect. That is the reality that the British public, in so far as they follow this complicated matter, would probably agree with. Only Europe gets the fierce and unusual scrutiny that we see every day, especially—and again, quite rightly—with our vividly accurate reports from the EU Select Committee and various sub-committees.
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