European Council

Part of the debate – in the House of Commons at 3:31 pm on 19 December 2005.

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Photo of David Cameron David Cameron Leader of HM Official Opposition, Leader of the Conservative Party 3:31, 19 December 2005

This was the year that Europe needed to change direction; this was the year that the people of Europe rejected the constitution; and this was the year that people called for the end of the obscenity of protectionism that damages the developing world. The Prime Minister rightly talked at the time of a crisis in European leadership, so the question for him is whether the British presidency and the new budget even begin to measure up to those challenges.

We warmly welcome the accession talks with Turkey and Croatia. We welcome what the Prime Minister said about Macedonia and the EU partnership with Africa, but has not progress elsewhere been desperately slow?

On the budget, does the Prime Minister remember having three clear objectives: first, to limit its size, when almost every country in Europe is taxing and borrowing too much; secondly, to ensure fundamental reform of the CAP; and, thirdly, to keep the British rebate unless such reform occurs? Is it not now clear that he failed in every single one?

First, the Prime Minister said that he wanted the size of the budget to be set at 1 per cent. of Europe's income. Can he confirm that the budget that he has just agreed is higher than that, higher than the compromise that he tabled and will mean £25 billion in extra spending? The Prime Minister says that that is intended to pay for enlargement, so will he confirm that Ireland, which is richer per capita than Britain, is getting more per head than Lithuania, Slovakia and Poland?

Secondly, the Prime Minister wanted to change the things that the budget was spent on. Is it not clear that he has failed to do that as well? Is it not the case that CAP spending will be higher next year, the year after that and in every year up to 2013? The Chancellor said that CAP reform was necessary to make poverty history. The Prime Minister told the House in June that he wanted to get rid of the CAP. Will he confirm that, four months later, his own Europe Minister said that the Government had not made any detailed proposals to reform the CAP? Is it not the case that the entire Government spent four years doing nothing about something that the Prime Minister thought was essential?

Will the Prime Minister be clear about what he has secured on the CAP? It is a review and it takes place in 2008. Can he confirm that, in that year, the presidency will be held by France? Is he aware that the French Foreign Minister has said that Jacques Chirac has secured that there will be no reform to the common agricultural policy before 2014? Is that not the opposite of what the Prime Minister actually wanted? In other words, he has completely failed to deliver CAP reform.

What about the Prime Minister's third objective: if all else fails, keep the rebate? All else did fail, and the Prime Minister's position was clear. He used to say the rebate was non-negotiable. He said at that Dispatch Box in June:

"The UK rebate will remain and we will not negotiate it away. Period."—[Hansard, 8 June 2005; Vol. 434, c. 1234.]

The Chancellor said that it was non-negotiable and fully justified. Then the Prime Minister changed his mind. The rebate could be negotiated, he said, provided that there was fundamental reform of the CAP. So it was clear that the only circumstances in which the rebate would be given up was if there were a commensurate and equal giving up of farm subsidies.

That is not an unreasonable position and, at that time, he knew all about the other considerations he mentioned today, including the importance of supporting enlargement. But what happened? The farm subsidies remain and £7 billion of the rebate has been negotiated away. If that was always the Government's plan, why was not any reduction in the rebate in the Chancellor's pre-Budget report? We are told that the Chancellor did not even know about the final deal. Normally, it is the Chancellor who does not tell the Prime Minister about what is in the Budget; this time the Prime Minister did not tell the Chancellor.

Can the Prime Minister confirm that, by 2011, the UK will be losing £2 billion a year and that that will be the baseline from which we negotiate? Will he confirm that the amount he has given up from the rebate is almost double our entire overseas aid budget this year?

In June, the Prime Minister told the House that no deal was better than a bad deal. He said:

"Europe's credibility demands the right deal—not the usual cobbled-together compromise in the early hours of the morning."—[Hansard, 20 June 2005; Vol. 435, c. 524.]

Did he remember that when he was cobbling together this compromise in the early hours of the morning? Why did he give up £7 billion for next to nothing? Vitally, how is the Chancellor going to pay for it—more taxes, more borrowing or cuts in spending? Which is it?

A good budget deal would have limited spending; it would have reformed the CAP and it would have helped change Europe's direction. Is it not the case that none of those things happened under the British presidency? Europe needed to be led in a new direction. Are we not simply heading in the same direction but paying a bigger bill?