EU: Budget — Question

– in the House of Lords at 3:01 pm on 4th March 2013.

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Photo of Lord Dykes Lord Dykes Liberal Democrat 3:01 pm, 4th March 2013

To ask Her Majesty's Government what representations they have received from the public on the negotiations for the new European Union budget perspective period to 2020.

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

My Lords, the Government have received a number of representations from the public on the negotiations for the multiannual financial framework 2014-20. These include letters and e-mails from individual members of the public and their Members of Parliament, charities and other non-governmental organisations and universities and research bodies.

Photo of Lord Dykes Lord Dykes Liberal Democrat

Does my noble friend agree that it was a very good deal for the Union and for this country, bearing in mind the balance of severe spending restraints at one end but long-term real infrastructure investment at the other? Is it not now the job of Conservative Ministers in the coalition to explain properly how the EU budget system works: a modest budget in comparison with other member states, no debts or deficit, no borrowing, payments that are always less than commitments, and a budget that does more and more good with less and less spent on farming?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I thank my noble friend for congratulating the Prime Minister on the excellent deal he brought back. We accomplished our three main objectives, which were to restrain the size of the budget, to make sure that we kept hold of our abatement and to resist any new EU-wide taxes. We shrank the budget and shifted it away from the more traditional areas, such as the common agricultural policy, into growth-oriented funds. I agree with my noble friend that we are shifting towards a pattern of expenditure that is more consistent with the reformers among us.

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, will the noble Lord accept that what we have here is a seven-year financial framework, but what really matters now is the annual budget year by year over the next seven years? Can he give an undertaking that this Government will pursue a system of zero-based budgeting in each of those seven years so that we can cut out budget lines that are wasteful and increase those budget lines which need to be increased rather than take this rather conservative approach of across-the-board cuts which cut the good as well as the bad?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

The noble Lord is correct that the devil is always in the detail and that it is our traditional practice year by year to negotiate very effectively on behalf of this country to bring about a better outcome in the annual budgets. However, it was extremely important to cap the overall size of the budget as a first step in the necessary reforms that we are all in favour of.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, do the Government yet know and have the public been told whether the EU's so-called Parliament is going to vote in secret on this budget? Is not even the suggestion that it might do so yet further proof of the EU's innately undemocratic and profligate nature? Is it not time that we closed the whole mistake down? What useful purpose does the EU now serve at such vast expense to all of us?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I will address the narrower question; so many noble Lords have much more experience on the broader question. I do not know whether the European Parliament intends to vote in secret. If it does, that is completely wrong.

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative

My Lords, will my noble friend comment on the reports in the papers yesterday that this budget agreement has been reached for certain sweeteners, amounting to billions of euros, being paid to practically every nation in Europe other than the United Kingdom?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

In this budget we are talking about over €900 billion, six separate headings of component parts, and an 'other items' budget which includes a range of other things. It is a big and complex budget with many different components. There were lots of parts to the negotiation, and these particular transactions are indeed part of it.

Photo of Lord Eatwell Lord Eatwell Shadow Spokesperson (Treasury)

My Lords, given that the EU budget is being reduced in real terms, can the noble Lord tell us what the consequential reductions are in expenditure in the UK?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

There were three key things that the Prime Minister wanted to protect in terms of the expenditure coming into the UK. The first was to make sure that our universities were very well positioned to bid for the grants available. That part of the budget has gone up and the rewards are based on excellence, so they should do well there. Secondly, he wished to make sure that our farmers are protected in terms of the environmental programmes that they support, which he did. Thirdly and finally, the structural aid that goes to our less well-off regions has been protected at the existing base level of €11 billion.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, none the less, is it not true that the final outcome of the arrangement for the next seven years will in fact mean that the United Kingdom will be paying £500 million extra per year? Is that really acceptable under the present circumstances with cuts to our own social services?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

The final outcome will be determined on a year-by-year basis depending on exchange rates, the growth of our national income and other such factors. The spirit of the question is indeed correct: our net contribution is likely to go up. That is simply because of the concessions made in the 2005 negotiation, when we surrendered some of the abatement advantages.