EU Budget Abatement

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 15th April 1999.

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Photo of Graham Brady Graham Brady Conservative, Altrincham and Sale West 12:00 am, 15th April 1999

If he will make a statement regarding the British abatement from the EU. [79446]

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The Berlin European Council concluded that the UK abatement will remain. Our objective was secured: we said that the Government would maintain the abatement, and we have done so.

Photo of Graham Brady Graham Brady Conservative, Altrincham and Sale West

I thank the right hon. Gentleman for his reply, although he has put a very positive gloss on a deal that will cost Britain nearly £200 million a year. Did the Government agree in Berlin that the rebate mechanism would also apply to other member states and to new member states? If so, who will foot the bill?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The conclusions of the Berlin summit, which I hope that the hon. Gentleman will not question, say that the UK abatement remains. The Berlin summit's conclusions also say that, in all the other matters on which we were pressing for advantage for the United Kingdom—whether on regional policy, on the highlands and islands or on Ireland—we got what we wanted. As for any other speculation on possible decisions of the Berlin summit, the decisions are as announced; there is nothing in them about what the hon. Gentleman is suggesting.

Photo of Bill Rammell Bill Rammell Labour, Harlow

Given the irredeemably split nature of the Conservative party on Europe, is my right hon. Friend aware of any independent commentator, anywhere in Britain or even in Europe, who believes that, had the Conservative party been in government, it would have brought back from Berlin a better deal than we have done? If he cannot find such independent verification, is it not time that, in their own interests, Conservative Members stopped scratching that open wound?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I hope that the Conservative party will have a proper period of reflection on what went wrong under the previous Government. It is absolutely clear that our policy of constructive engagement has achieved far greater results—on the budget, on regional policy, in advantages for Ireland and the highlands and island, as well as on the abatement—than the Conservative party's carping and narrow isolationism ever could have done. My hon. Friend asked whether I have some advice for Conservative Members on what they might do. I simply refer them to the manifesto issued by the Conservative party in Scotland for the Scottish parliamentary elections. It starts by saying: On May 1st 1997 the people of Scotland told us what they thought—we got it wrong.

Photo of John Whittingdale John Whittingdale Shadow Spokesperson (Treasury)

Will the Chancellor give an absolute assurance that, during the negotiations on the future of the United Kingdom abatement, no horse-trading or compromise was done on the withholding tax? Is he aware of the consternation in the City of London, particularly among the 10,000 people whose jobs are at risk, at the fact that the Deputy Prime Minister does not even know what the withholding tax is? Will the Chancellor stop dithering and just say now that the Government will veto the measure?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I can give the hon. Gentleman an absolute assurance that there was no horse-trading on the matter that would have been in any way damaging to Britain—[HON. MEMBERS: "Ah!"] Well, there was no horse-trading on the matter, if he wants that assurance. I can also say that—in preference to the Conservative negotiating tactics that would have left Britain completely isolated in Europe on that and on every other issue—we shall get the best deal for Britain on the matter, as we did at Berlin.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours Labour, Workington

I congratulate my right hon. Friend on his negotiations on the abatement. However, is not the reality that the existence of the abatement—which was negotiated by a former Prime Minister—over many years, has undermined our negotiating position within the European Community, particularly in CAP reform?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

No, I do not accept that. The abatement is wholly justified, and we have defended it. Conservative Members said that we would give away the abatement—we did not. The conclusions of the Berlin summit accept that the abatement continues, and Conservative Members should be congratulating us.