Connecting Europe Facility

Thursday 19th January 2012 Commons Chamber

12:44

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I beg to move,

That this House takes note of European Union Documents No. 16176/11 and Addenda 1 and 2, No. 16499/11, No. 16006/11 and Addenda 1 and 2, No. 15629/11 and Addenda 1 to 35, No. 15813/11 and Addenda 1 and 2, relating to the European Commission’s draft regulations on the Connecting Europe Facility in the next Multiannual Financial Framework 2014-20; supports the Government’s view that at a time of ongoing economic fragility in Europe and tight constraints on domestic public spending, the Commission’s proposal for substantial increases in EU spending in this area compared with current spend is unacceptable and incompatible with the tough decisions being taken to bring deficits under control in both the UK and countries across Europe; considers that spending in this area should focus on identifying and providing genuine EU-added value, and not on spending where domestic governments and the market are better placed to act; and further supports the Government’s ongoing efforts to reduce both the Commission’s proposed budget for the Connecting Europe Facility and the overall level of spending in the next Multiannual Financial Framework 2014-20.

The European Commission’s proposal for a connecting Europe facility for transport, energy and telecommunications infrastructure cuts across the work of Government. I am therefore grateful that I have been joined in the Chamber by ministerial colleagues from the Department of Energy and Climate Change, the Department for Transport and the Department for Culture, Media and Sport, in putting forward the Government’s case on the motion.

Matters of deficits, spending and growth are at the top of all of our concerns, not just here in the UK, but across Europe. Those issues go to the very heart of the continued instability in the euro area. That ongoing instability vindicates the Government’s decision to get ahead of the curve, cut our deficit and impose strict financial discipline on our budget.

[Mr William Cash (Stone) (Con)]

Whereas many hon. Members will agree with the sentiment of the Government’s motion, the idea that we should contribute to the EU indirectly through the International Monetary Fund on the scale that is proposed is unacceptable.

[Mr Hoban]

My hon. Friend’s point is outside the topic of the debate this afternoon. He is aware of the Chancellor of the Exchequer’s comments and assurances on that matter.

As I have said, at home, we have taken tough decisions to tackle our deficit and demonstrated leadership. We expect exactly the same leadership on spending in Europe from the European Commission, but whether on the annual budget or the financial framework, such leadership has been completely lacking. Instead of finding ways to cut spending or to drive better value for money, the Commission, through the connecting Europe facility, proposes to increase spending on transport, energy infrastructure and telecommunications by 400% as part of a multi-annual financial framework that increases payments by more than €100 billion over its duration.

Just as at home, where we have prioritised spending on growth while tackling the deficit, the Government would like a higher proportion of a restrained EU budget spent to promote sustainable growth. The proposal does not achieve that objective. We are arguing that spending should be lower, and that what spending remains should be focused on areas that offer genuine added value across the EU.

[Mr John Redwood (Wokingham) (Con)]

A number of people who have written to me condemning the High Speed 2 project have alleged that Britain has to build it under the EU network ruling. Will the Minister confirm that Britain remains free to make its own decision on whether to have High Speed 2?

[Mr Hoban]

My right hon. Friend is, as is often the case, spot on. There is no requirement under the proposal for us to build High Speed 2.

[Kelvin Hopkins (Luton North) (Lab)]

Following the intervention from the right hon. Member for Wokingham (Mr Redwood), is not the nation state rather than the EU the best place to judge how much should be spent, what it should be spent on and how efficiently it should be spent?

[Mr Hoban]

The hon. Gentleman makes an important point. There is a debate to be had on where such decisions should be taken and what our priorities should be. That is why it is important for us to impose discipline on the EU budget and try to influence debate on it to ensure that when money is spent, it is spent well and wisely in pursuit of our objectives.

Let me remind the House of three key aspects of the Commission’s proposal for the next financial framework: first, an increase in the budget of more than €14 billion a year compared with a freeze on current levels; secondly, a new financial transactions tax to fund the EU budget; and thirdly, an end to the UK’s permanent rebate. That financial framework proposal and the proposals to increase spending through the connecting Europe facility are unacceptable.

In November, the House agreed that the Commission’s financial framework was

“unacceptable, unrealistic, too large and incompatible with the tough decisions being taken in the UK and in countries across Europe to bring deficits under control and stimulate economic growth”.

[Graham Stringer (Blackley and Broughton) (Lab)]

I am following the Minister’s logic carefully and agree with him, but would it not be more sensible to set an objective of reducing the European budget by around a third, which is the cut that has been imposed on local government?

[Mr Hoban]

I will set out the Government’s position on the financial framework in my own sweet time.

Continuing financial instability in the eurozone owing to unsustainable levels of public debt makes the case for restraint stronger: the EU budget must be part of fiscal consolidation, not immune to it. As the Prime Minister has stated, alongside leaders from France, Germany, the Netherlands and Finland, the maximum acceptable increase in EU budget size until 2020 is a freeze in current payment terms.

Since November’s debate on the financial framework, we have made significant steps towards achieving that goal. In the face of a Commission proposal to increase the 2012 budget by 4.9%, the UK led the European Council in demanding, and achieving, a restriction of the 2012 budget to a real freeze to 2011 payments. In pursuit of a real freeze in payments, the UK’s position must, and will, be consistent and clear in annual budget negotiations, financial framework negotiations and negotiations on the individual spending programmes that make up the framework, of which the connecting Europe facility is one.

[Mark Reckless (Rochester and Strood) (Con)]

When the Minister refers to seeking to achieve a real-terms freeze, what deflator or measure of inflation is he using?

[Mr Hoban]

The measure that is used in these discussions is the forecast of inflation provided by the EU, which is currently 2%.

The nature and size of these spending programmes are negotiated in parallel with the negotiations on the overall financial framework. That means that the eventual size and shape of the financial framework are influenced by negotiations on those individual programmes. Given our call for a real freeze, any increase in the size of individual programmes means a corresponding decrease in other programmes.

[Mr James Clappison (Hertsmere) (Con)]

My hon. Friend is making a compelling case. Will he confirm, as appears from the documents before us to be the Government’s view, that in just one of the documents—that on the trans-European networks—the European Commission is proposing a €40 billion increase above the level of the freeze he described?

[Mr Hoban]

In that €40 billion, there are three components. At the moment, about €6 billion is spent. The proposal before us represents an increase of €24 billion, which takes us to €30 billion. In addition, there is a transfer of €10 billion from structural funds, which gets us to the €40 billion figure. The actual increase is €24 billion, or about 400%. I think the whole House would agree that an increase of that scale is not acceptable. The €24 billion increase set out in the documents has to be seen in the context that the Commission’s financial framework proposal is €100 billion more than a real freeze. The Government cannot accept the Commission’s proposal for an increase in the facility, and we will argue for significant reductions to it.

[Mrs Anne Main (St Albans) (Con)]

In discussions with the Commission about the proposed increases in spending, what justification does the Commission give regarding the ability to afford this extra spending, given the crisis afflicting the eurozone?

[Mr Hoban]

Of course, in a way, the Commission’s view is that it is probably somebody else’s problem to resolve the financing. It put forward measures in the multi-annual financial framework that will increase the amount of money flowing to Europe. It has put forward an EU-wide financial transactions tax, which we object to. Its view is that if such a tax went ahead, the revenues would go not to member states, to spend at their discretion, but to the European Commission to spend. As part of its financial framework, the Commission also proposed the end to our rebate—another proposal we would reject.

The Commission would look to member states to meet the cost of these projects, which is why it is absolutely vital that we work with like-minded allies to restrain the EU budget and ensure that we can spend more money at home, while less money goes abroad. [Interruption.] The hon. Member for Nottingham East (Chris Leslie) chunters, but if he had listened to my speech, he would have heard me say that we have signed a letter with the Chancellor in Germany, Angela Merkel, and with the French President calling for a real-terms freeze in payments. That is the sort of alliance we can build in Europe. I will come to the hon. Gentleman’s amendment later, but I am rather bemused: the Labour Government talked tough in EU negotiations, but they happily gave away our rebate, costing this Government €10 billion over the life of this Parliament.

[Mr Peter Bone (Wellingborough) (Con)]

The Minister is being far too generous to Labour Members. Over the last five years of the Labour Government, our net contribution to the EU was an extortionate £19 billion. Under this Government, it will be £41 billion, because Labour gave away a large part of Mrs Thatcher’s rebate. That is a disgrace, and Labour should be held to account for it.

[Mr Hoban]

I like to be generous in politics, but the previous Government were generous in giving away our money, by giving away part of the rebate. I will come back to that in a moment.

[Dan Byles (North Warwickshire) (Con)]

My understanding—I was not in the House at the time, so perhaps my hon. Friend can help me—is that the rebate was given up in exchange for reform of the common agricultural policy. Will my hon. Friend update us on how well that is going?

[Mr Hoban]

My hon. Friend is absolutely right: there were bold and tough words from the previous Government about being prepared to give up part of our rebate for real reform of the CAP. Well, we gave up our money, but we did not get real reform. That was typical of the Labour party’s reactions when it was in government: lots of tough talk, but no action to back it up.

[Kelvin Hopkins]

Will the Minister give way?

[Mr Hoban]

I will give way just once more, but then I want to try to make some progress.

[Kelvin Hopkins]

Like Government Members, I was opposed to giving up that great tranche of our rebate. The Government have made much of the issue. Is it not time they started trying to renegotiate the rebate to get it back again?

[Mr Hoban]

We have made it absolutely clear that the rebate is there to stay, and that is one of the key parts of our negotiating strategy.

I want to say a few words about infrastructure spending. The Government have made it clear that focused infrastructure improvements are a domestic priority. When undertaken wisely, it is clear they can boost growth, protect the environment and improve lives. In his autumn statement, my right hon. Friend the Chancellor announced investment of £100 million in the creation of up to 10 super-connected cities across the UK with 80 to 100 megabits per second broadband and city-wide, high-speed mobile connectivity. Last week, the Secretary of State for Transport announced details of the new high-speed rail network.

However, the key is having carefully focused investment. When prioritising spending for infrastructure, the Government have taken the wider economic context into account. The urgent need to reduce our domestic deficit has meant that we have had to choose our investments carefully and focus infrastructure spending on where it can have the most positive effect.

That is the approach the Commission needs to take to European infrastructure spending, focusing affordable levels of spending where they will make most difference. Therefore, while the Government will, first and foremost, argue for a reduction in the overall size of the connecting Europe facility budget, we will endeavour to ensure that the final settlement agreed is focused on spending money where it will add most value. That means spending money only where neither the market nor domestic Governments are better placed to act—the point the hon. Member for Luton North (Kelvin Hopkins) made in his first intervention.

We will be pushing the Commission for additional information to allow us to judge where the money will best aid growth and support our environmental objectives. That is consistent with the Government’s desire to see spending that promotes sustainable growth take a bigger share of a tighter budget in the next financial framework. The ambition of the connecting Europe facility, while laudable, must respect the fiscal realities of Europe.

The Opposition have tabled an amendment to today’s motion. It is rather incredible, in a week when Labour’s policy on deficit reduction has become ever more confused, that the hon. Member for Nottingham East has tabled an amendment calling for an effective deficit reduction strategy. Ever since the shadow Chancellor said on Saturday that

“we are going to have keep all these cuts”,

the Labour party has been totally confused, with its deputy leader later saying:

“We’re not accepting the Government’s austerity cuts, we are totally opposing them”.

So Labour Members accept the cuts, but then oppose them.

Labour Members cannot say they are credible on the budget, because of the legacy they have left. Despite our entering the downturn with the largest structural deficit in the G7, the Labour leader told Andrew Marr this weekend that he did not think Labour spent too much. Let us remind him that it is because of Labour’s record on spending that our triple A rating was on negative outlook when the Labour party left office. That downgrade threat has been lifted because this Government have a credible and effective deficit reduction strategy. One would think that the Labour party would have learned from that, but, no—its five-point plan would add £20 billion to the deficit this year. Rather than seeing an effective debt reduction strategy from Labour, all we have is more of the same: more spending, more borrowing and more debt. So before Labour lectures anybody else on the deficit reduction strategy, it had better get its own house in order.

If that was not bad enough, the hon. Member for Nottingham East has scored another own goal in his amendment by calling for reform of the common agricultural policy—we touched on that earlier. We have heard brave words before from Labour politicians about CAP reform. Tony Blair said that

“the rebate remains because the reason for the rebate remains. Of course, if we get rid of the common agricultural policy and we change the reason why the rebate is there, the case for the rebate changes.”—[Official Report, 29 June 2005; Vol. 435, c. 1293.]

Those were tough words, but as we know, he gave way to the French, sacrificing €2 billion in our rebate a year, which will cost the country €10 billion over the lifetime of this Parliament. In the current financial framework, CAP spending has not fallen, as Labour said that it would, but increased by €3 billion. So it is all very well the hon. Gentleman talking tough in his amendment, but we have heard it before from Labour—all bark and no bite.

Achieving the priorities that the House has supported in the next financial framework will not be an easy task. The Government need to defend the rebate, resist EU taxes and restrain the budget size. The UK can deliver results in Europe, as outcomes in the 2011 and 2012 annual budget negotiations have shown, but to achieve our overall aims we must be constant and vigilant in our resistance to increases in the budget. A 400% increase to infrastructure spending in the EU budget, without any corresponding reductions elsewhere, is unacceptable in the current economic environment. We will work with our allies to cut this programme down to size, delivering fiscal restraint and value for money. Although we are clear that we need infrastructure investment to boost productivity and growth, projects need to be effective and affordable, but the plans in the connecting Europe facility proposed by the Commission are neither. I therefore urge my hon. Friends to support the motion.

[Madam Deputy Speaker (Dawn Primarolo)]

I inform the House that Mr Speaker has selected amendment (a), in the name of the hon. Member for Nottingham East (Chris Leslie). I call him to move the amendment.

13:01

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I beg to move amendment (a), in line 5, leave out from ‘2014-20’ to end and add

‘believes that there should be no overall increase in expenditure compared with current levels; takes note of the concerns about the Eurozone economy expressed by Standard and Poor’s that “a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues”; calls on the European Commission to reduce its proposed budget and the proportion of the Multiannual Financial Framework set aside for the Common Agricultural Policy and to reorder the Connecting Europe Facility proposals to phase capital infrastructure components so that they enhance employment and economic growth within a more limited multi-year budget; supports action to promote EU competitiveness and review the impact of the structural funds; and calls on the Government to develop more effective deficit reduction strategies at home and across the EU by advocating urgently a credible plan for growth.’.

I am glad that the amendment has been selected, because the Government’s motion is missing a rather important component—something conspicuous by its absence. To give hon. Members a clue, it is a word missing not only from the motion but from our economy.

What problem do the Conservative party, and those very full Liberal Democrat Benches, have with the concept of economic growth? The lack of growth is the reason the Government say they have to borrow £158 billion more than planned last year. It helps to explain why in the three months to November unemployment was at its highest level since 1994; and, of course, it explains why business confidence has collapsed. The Government are either ignorant of the negative impact that an austerity obsession here and in Europe is having on the prospects for growth, or they are wilfully pulling the rug from underneath the economy in the twisted expectation that that will somehow restore confidence and deal with the sovereign debts created in the wake of the global financial crisis.

The European Commission’s plans before the House are revealing of the current approach to economic policy across Europe and of the Government’s lack of influence and lack of interest in showing a positive lead. We are all agreed on the need to reduce the planned budget for the multi-annual financial framework for the years until 2020, and we too believe that there should be no overall increase in expenditure when compared with current levels, but why are Ministers totally failing to make the case for a proper growth strategy in Europe with our main trading partners, with whom we need to do well if our exporters are to succeed?

[Mr Cash]

I am extremely interested in the shadow Minister’s approach to the question of growth. When Labour was in government, over several years I raised the question about lack of growth and the vast increase in indebtedness, but there was no response or attempt to deal with over-regulation—over-regulation being one of the main reasons we are not getting growth. Does he accept therefore that it is difficult to stomach any lectures from him on growth? I have criticisms of the failure on growth in Europe and in this country, but we certainly do not want any lectures from him and his team.

[Chris Leslie]

I hope that I am not striking a lecturing tone. I am simply imploring the Government to pull their finger out and do something about economic growth in the UK and Europe. I am making the point that what happens in Europe affects our economy. The regulatory debate did indeed go on for many years. The Minister himself called for deregulation and light-touch approaches across the City and elsewhere. We have to get regulation issues correct, and we all have lessons to learn from what went wrong in that regulatory debate. We have admitted that mistakes were made, but I am still waiting for the Minister to accept that he too made poor decisions in calling for deregulation, particularly in financial services.

Nothing in the Government’s motion seeks to steer the Commission towards a more activist role in boosting and stimulating European economies, particularly in the short term. There is no sense that the Government are seeking to influence this connecting Europe facility in order to re-phase capital investment and bring real help now to an economy on the brink. One-dimensional collective austerity, as advocated by our Government—and also, unfortunately, by the Germans and others—makes it harder to get deficits down, not easier to reduce public debt.

Hon. Members do not have to take my word for it. Six days ago, the credit ratings agency Standard & Poor’s, after downgrading the status of some eurozone nations, stated that

“a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues”.

Even the credit rating agencies are now worried about the lack of growth in the European economy and about whether the eurozone has the right strategy for building its way out of the fiscal hole in which it finds itself.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Given that we are net contributors to the EU budget, which puts a great burden on our taxpayers, will the hon. Gentleman explain how building a railway in Romania would help the UK economy?

[Chris Leslie]

It is important that the European Commission, and the eurozone in particular, focus on getting economic growth. My simple point is that it is not happening. An austerity-only approach is being taken, but it is not working, just as it is not working in this country. Of course we have to ensure that we reduce the proposed budget increases—we do not disagree with that—but there are ways to stimulate an economy within that envelope, including through a phased approach towards the European spending review process. That is my point. It is the glaring omission from the Government’s plans so far.

[Mr Redwood]

Will the shadow Minister bring us up to date with Labour thinking on the IMF having more money to lend to save the euro? Does Labour think that it would be a good idea because it would promote growth, or a bad idea because it would damage the British budget?

[Chris Leslie]

We are all waiting to see what proposals come forward. The Chancellor has said that he will come to Parliament and let us have a say on many of these things. Indeed, perhaps the Minister can help us out with the timing of those proposals—[Interruption.] If he would care to listen to my questions, perhaps he could also tell us when we will get the Bill to enact the European financial stabilisation mechanism permanent bail-out fund. We are all waiting for that. The eurozone countries are supposed to be rolling together the European financial stability facility and the EFSM into that permanent arrangement, but as I understand it we will have to legislate for that. Will he tell us when that will happen, because it is related to this question about potential IMF funding? We need clarity from the Government—and from the IMF as well.

[Graham Stringer]

I completely follow my hon. Friend’s logic, but surely this is not the largest issue facing the future of the European economy. The largest issue is that the people running Europe are determined to keep a political project going by competitive deflation in the countries of Europe. The best solution for the whole European economy is for an orderly break-up of the euro, particularly for those economies, such as Greece and probably Italy and Portugal, that are, in effect, bankrupt.

[Chris Leslie]

I do not agree with my hon. Friend that the break-up of the euro would be in the UK’s interests, but there are dangers with a permanent deflationary lock in the fiscal policies of the eurozone countries. That is why, both in the UK and across the eurozone, far more must be done to get growth into those economies. They have to grow in order to build their way out of the hole that they are in. In that sense, the ambitions, which many people share, of improving infrastructure across the EU, while laudable, need to be seen in the context of the affordability criteria that must be applied to them. We have to act to unblock the clogged arteries of Europe, connecting the major cities of the continent, making it easier for business and opening new opportunities for growth in the single market. Capital investment in infrastructure is extremely important as a driver for growth.

What progress are Ministers making in shaping the European spending review? That is absolutely at the heart of today’s debate. After December’s phantom veto—the first veto in history that stopped precisely nothing—the UK has to pick up the pieces and try to influence the important EU budget process. The Minister was throwing around history lessons about the common agricultural policy and various other things. However, we need to know what exactly this Government are going to do about the common agricultural policy. What is he going to do about the spending proposals? Rather than walking away before the negotiations even begin and leaving another empty chair, the Minister has to raise his voice, build some alliances and secure a more appropriate level of expenditure that also shifts priorities.

[Mr Bone]

We have an excellent shadow Minister, who is always on top of his brief, but I do not think he was here when Tony Blair gave a commitment that the CAP would be reformed, so that our net contributions to the EU now would be at the same level as they were then. Clearly that was wrong. Would the hon. Gentleman and his party support our most excellent Minister going into battle and saying, “We’re not going to pay any more than our initial subscription was to the EU”?

[Chris Leslie]

I did not quite hear that from the Minister. If that is the Government’s position—perhaps the hon. Gentleman has a hotline to the Prime Minister on these matters—I would be very interested to hear it.

I agree that the proposed budgets for EU institutions are still too high. Export refund practices have to be cut back. We have to change agriculture policy so that it is fairer to smaller farmers and ends the ridiculous tobacco and wine subsidies that are lavishing payments on some of the very wealthiest players in the wealthiest EU countries.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I wonder what the hon. Gentleman’s proposals might mean for crofters in the highlands and islands of Scotland.

[Chris Leslie]

We have to change the common agricultural policy. My point is that the CAP is far too heavily involved in subsidising the big multinational farming institutions, which are the largest agricultural producers, and is not fair enough on some of the smallest farmers and crofters.

[Kelvin Hopkins]

One simple point, which I have made before, is that if the common agricultural policy were abolished, we could continue to subsidise farmers at the same level and be net beneficiaries.

[Chris Leslie]

There is much agreement on the need to reform the common agricultural policy. More should have been done in the past, but more needs to be done now. I want to hear the Government’s strategy on that. I want to hear how they are going to win some concessions and what they are doing to change the negotiation stance. They are certainly doing nothing about refocusing growth priorities or reforming the common agricultural policy.

We have to re-order the connecting Europe facility so that we can phase capital infrastructure components and enhance employment and growth. While the 26 other countries are busy negotiating their new economic treaty without the UK taking part, they will realise that the EU budget is highly relevant to their economic predicament, particularly in the eurozone. I would therefore like to ask the Minister an important question: how will he ensure that he keeps track of all those discussions on the sidelines—all those deals being done in meetings that he will not be party to—so that the UK voice is part of the process?

We are discussing an important series of proposals, which touch on broadband, transport and energy policy. A year ago, the Government unveiled their broadband strategy. It is becoming clear that the vast majority of local authorities are not likely to meet the Government’s universal broadband target by 2015, which has already slipped by a couple of years compared with the target that we set when in government. We tabled some freedom of information requests before the Christmas break and discovered that 70% of local councils said that they had

“not made any plans, provisions or budgeted to take advantage of the Government’s funding allocation for broadband provision,”

and that 74% had had no assessment made of the likelihood that the roll-out of superfast broadband in their areas would be completed by 2015. The Minister therefore needs to explain why a quarter of local authorities say that they have not even been contacted by BDUK—Broadband Delivery UK—about the need to secure funding; indeed, only a quarter have made plans to finance universal broadband roll-out. Even the Countryside Alliance and the Federation of Small Businesses agree that the Government are not doing enough to support Britain’s digital future.

[Charlie Elphicke (Dover) (Con)]

It was the previous Labour Government’s policy to have a telephone tax. Does the shadow Minister still believe that the telephone tax is the right way forward? Yes or no?

[Chris Leslie]

I really do not think that anybody was proposing a telephone tax in the sense that the hon. Gentleman characterises it. We have to find ways to fund improvements in broadband communication, but my question to him and the Government is this: what exactly is their target for broadband roll-out? They have still not said. The EU is talking about some 30 megabits per second and 50% at 100 megabits per second by 2020, which is quite an ambitious target, and we had our targets for 2012. Perhaps the Minister can consult his colleagues on that.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Will my hon. Friend give way?

[Chris Leslie]

I will give way to my hon. Friend in a moment, but perhaps the Minister can listen to this. What exactly is the Government’s 2015 target, by megabits per second, for broadband roll-out? I would be very interested if he could elaborate on that. I will give way to the Minister if he has an answer to that, but perhaps my hon. Friend can also help me.

[Chi Onwurah]

My hon. Friend is making some excellent points. It should also be pointed out that the Labour party’s target for universal broadband was fully funded from the digital switchover. The Minister talks about the need for targeted infrastructure investment. Does my hon. Friend agree that what businesses need right now, particularly rural businesses up and down the country, is a decent broadband speed to enable them to get online and contribute to growth as part of our recovery?

[Chris Leslie]

My hon. Friend is absolutely correct. It is imperative that rural businesses should have that connectivity and that level of dialogue, e-mailing and information exchange as soon as possible. The data must be able to get out from those businesses and their localities. This delay and prevarication from the Government, in a strategy that does not even seem to have a target, is entirely atrocious.

On transport, no one would disagree—there is quite a lot of cross-party consensus on this—that we have to tackle bottlenecks and missing cross-border links, and promote new ways of improving the single market. We agree with the Government that there are potentially added elements of bureaucracy in the proposed project management of the core networks which conflict with the principle of subsidiarity. There is a risk that the comprehensive networks, and not just the core corridors that the EU is focusing on, might lose out if structural funds are not available for UK transport infrastructure projects. We want the trans-European network policy to concentrate not just on jobs and growth, but on decarbonising the transport sector—a modal shift from road to rail, particularly for freight—on greater connectivity within networks and, of course, on improved transport safety. A transport infrastructure that addresses economic disparities, and is aimed at delivering jobs and tackles the pinch points, gaps and capacity constraints in the EU networks is essential to tackling Europe’s continuing economic issues.

The Commission is probably correct to highlight the infrastructural deficiencies in our collective electricity and gas networks. However, there are some highly prescriptive elements of the Commission’s proposals, which may not allow the right degree of flexibility to accommodate some of the domestic UK projects and procedures that are already under way. For instance, there is a danger of overlap of activity on the North sea interconnector, which is currently being examined for feasibility. As for planning issues, much of the streamlining process has already been dealt with through the Planning Act 2008, despite the fact that the Government have already stepped away from some of the benefits of the Infrastructure Planning Commission. We see no benefit in overlaying anything on that, leading to duplication and slowing processes down. We suggest that the Commission should instead concentrate its energy infrastructure proposals on the carbon capture and storage agenda.

Existing procedures for bidding for EU funding are under way, but the value of the funding is affected by the carbon trading regime. In recent months it has fallen, making the available investment worth less. Carbon capture and storage could make a significant difference to the viability of fossil fuel electricity generation, and has yet to be proven on a commercial scale. The role of EU funding in this area is becoming more significant since the collapse of domestic carbon capture and storage projects here in the UK in the past year. Despite the Government’s promise that the £1 billion funding would remain available for CCS, it has now been reallocated to the wider infrastructure fund announced in the autumn statement, leaving carbon capture strategy in the UK in some doubt.

The Minister mentioned the fact that the proposals touch on innovative financial instruments. There is a serious lack of clarity on what exactly the Commission is proposing, and what exactly the Government’s principles are on innovative financial instruments. We need more substantive debate on this matter, and more information ahead of the discussions. The Commission needs to reduce its proposed budget, and the Minister needs to get off the sidelines and step into the negotiations. The Government should be doing far more to reorder the phasing of the capital infrastructure schemes here in the UK and across Europe. Above all, they should develop more effective deficit reduction strategies at home and across the EU, with an urgent and credible plan for growth.

13:21

[Andrea Leadsom (South Northamptonshire) (Con)]

As I understand it, the EU’s ambition is to develop a trans-European network in transport, telecommunications and energy as part of the treaty on the functioning of the EU. It therefore wants the budget for 2014 to 2020 to include sufficient funds to put an extra €50 billion into a connecting Europe facility. However, it also wants to regulate EU-wide programmes. Specifically, on transport, it is proposing that member states commit to a core network by 2030, and to a comprehensive transport network by 2050. The EU estimates that it would cost Britain between £64 billion and £137 billion to meet those targets over that period. Does the Minister believe that if such a regulation were to come into force under qualified majority voting, it could force Britain to spend that amount of its own resources in a way that would be directed by the EU? That would be an astonishing outcome.

On energy, the Commission believes that member states need to spend €200 billion on electricity and gas networks alone, and that €1 trillion is needed for EU energy infrastructure in total. Will the Minister tell me what proportion of that the UK would be required to spend, and whether that requirement would be enforceable at EU level under QMV?

On telecoms, the EU target for rolling out broadband is different from that of the UK. The Commission believes that there are telecoms bottlenecks that hinder the single market. In the light of our own recent commitment to rolling out superfast broadband, I would be interested to know whether the Minister thinks that the British Government need the EU’s advice or the Commission’s targets on how, and to what level, we roll out superfast broadband here. Are those legitimate areas for the EU to be involved in, or are they domestic matters? Does the Minister see a pan-European angle to these questions or not?

What is the Minister’s view of top-down EU expenditure, made entirely at the taxpayer’s expense, as opposed to private sector, or combined public and private sector, investment? Is he aware of any efforts by the Commission to test private sector interest in some of its pet schemes? What proportion of the roughly €7 billion that Britain’s taxpayers would contribute to the connection fund would be spent here, where there is a huge backlog of infrastructure needs, rather than elsewhere in Europe?

I want to make three broad comments on the proposals, in support of the motion. First, I find it astonishing that the European Commission seems to be the only bit of Europe in which the recession, the financial crisis and the issues of sovereign insolvency have passed unnoticed. It is as though it were inhabiting a parallel universe.

[Harriett Baldwin (West Worcestershire) (Con)]

Does my hon. Friend agree that the cost of moving from Brussels to Strasbourg on a regular basis is an ideal budget item to be struck through before forcing member states to spend money on these proposals?

[Andrea Leadsom]

Yes, I completely agree with my hon. Friend’s excellent idea. That would be high on my list of bits of wasteful bureaucracy to get rid of.

What sort of parallel universe is the European Commission inhabiting, if it thinks it reasonable to be expanding the European budget for 2014 to 2020 in the current climate? Why is the EU seeking to take power and control over these particular policy areas, at a time when they are already high on our own Government’s agenda? Requiring Britain to contribute to EU funds is not acceptable, and giving the Commission the authority to require Britain to make expenditure on its own domestic projects is equally unacceptable.

My second point is that the EU has proved itself time and again to be an inefficient allocator of scarce resources. In regard to structural funds, Open Europe estimates that Britain has contributed €33 billion between 2007 and 2013, and that we have received roughly €9 billion. If we took back control over that €33 billion, we might well wish to continue to contribute to the poorer EU member states—that is, those with a national income of 90% of the average or less. However, if we had contributed the same amount to those poorer member states, we could also have spent the same €9 billion that we received from the structural fund, creating a £4 billion saving. If Britain had allocated that same amount, €9 billion, to its own regions, plus the same amount to the poorer EU states, there would have been a £4 billion saving that could have gone towards reducing our deficit or investing further in the poorer regions of the UK. The difference identified by Open Europe’s estimate is a result of the leakage due to the recycling of cash between the richer countries.

It is interesting to note that the Department for International Development spends about 4% of its budget on administration, with a target of 2%. By contrast, the EU Commission spends 5.4% of its contributions to overseas aid on administration. No doubt it is very conscious of that figure, as it has been singled out for comment.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The hon. Lady is making quite an interesting point, but does she not agree that the problem with her argument is that the British state does not have any convergence mechanisms?

[Andrea Leadsom]

I am sorry, but I am going to have to ask the hon. Gentleman to repeat his question. It does not have any what?

[Jonathan Edwards]

It does not have any convergence mechanisms for redistributing wealth around the British state; that is the whole problem.

[Andrea Leadsom]

I thank the hon. Gentleman for his question. He makes a good point, and he is absolutely right. It might interest him to know, however, that of the UK’s 37 regions—as defined by the EU—only two, Cornwall and west Wales, are net recipients of structural funds. All the other regions have been net contributors, including the highlands and islands region, which has contributed a net €66 million to structural funds over the past seven years, and the Tees valley and Durham region, which has contributed a net €453 million over that same period. He makes an interesting point, but in my view Britain would be far better placed to decide where to allocate those scarce resources.

Another illustration of the EU’s inability to do that job is the recent Commission study that found that 170,000 full-time equivalent personnel were needed for a whole year to administer the EU’s structural funds during the last budgetary period. That is an unbelievable number of people. On the grounds of efficiency, therefore, the allocation of funds would be far better being done at home.

My third point relates to legitimacy and localism, particularly in the areas of transport and energy. We are talking about huge, extraordinarily expensive projects that are deemed to be in the national interest. There is no doubt that, while we all want instant access to energy, we are not all so keen to have a nuclear power station two miles down the road. The case must always be made by democratically elected, legitimate leaders for the need for a particular project and/or location. HS2 is a very good example of a project on which a majority of those consulted rejected it, yet where the Government decided that it was in the national interest to disregard their views. In the case of the third runway at Heathrow, the Government decided that public opinion outweighed the national need for aviation expansion. My point is that the EU, with its remote and bureaucratic image in Britain, is hardly the right place from where decisions on projects that affect lives and communities should be taken. The great risk is that local priorities for infrastructure will be undermined while infrastructure for energy and transport projects will be forced on local communities that do not want them.

Let me end with a word of friendly advice to the European Commission. It should focus on facilitating the single market, expanding its membership and contributing to areas that are of common interest to all member states and where the EU together can add value. It should keep away from European domestic affairs and avoid the pernicious creeping power grab that this latest proposal so clearly highlights.

13:31

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I disagree with the Government motion. I do so in part because the economic and financial position set out in it is in opposition to the policies I have espoused since I was elected, and I oppose it in particular because it would have the effect of further disadvantaging my constituents and my country.

The budget for the entire European Union looks small by comparison when placed in the context of national budgets. The majority of expenditure is on items related to agriculture and to those parts of the European Union that qualify for the cohesion fund in order to promote those areas so that their gross value added is increased to compete with more established areas of the European economy. What a pity that the British state does not employ similar convergence mechanisms! I hope that explains my earlier intervention.

The cohesion fund areas include my constituency in the west Wales and the valleys region. Whatever the arguments for the whole of the UK, and we have heard many powerful arguments to that effect, the redistributive nature of European funding is beneficial for many of my constituents. Indeed, the €50 billion recommended by the Commission in the next multi-annual financial framework for the connecting Europe facility specifically includes 20% ring-fenced in the cohesion fund for transport infrastructure.

[Mrs Main]

I come from Wales, so I might have to declare an interest in this matter. Does the hon. Gentleman believe that a European state is better at giving money to his constituency than people who are already within the UK?

[Jonathan Edwards]

I thank the hon. Lady for her intervention; I shall touch on that as I continue with my speech. That is certainly the case as far as transport investment in Wales is concerned.

In terms of the TEN-T—the trans-European transport network—the proposals for UK core nodes show little connection with the needs of Wales and the improvement of Welsh infrastructure, which is key to developing the economic prospects of Wales. None of the nine urban nodes is in Wales—neither the Cardiff nor the Swansea city regions—while Cardiff airport is not included in the airports provisions. Although Cardiff and Newport ports are both included among the 15 named ports, neither is in the west Wales and the valleys areas that receive cohesion fund support.

The Commission determines a Dublin-London-Paris-Brussels corridor—corridor 8, which includes a route from Belfast to Birmingham through Holyhead. However, critically, no southern corridor route through Wales is referenced among these major routes. Milford Haven in south Wales is the third largest port in the British state and an ideal point for a southern corridor route to and from the southern parts of the Republic of Ireland. I notice that Cork—a port, and the obvious linkage between the Republic of Ireland and Wales—is instead linked with Dublin, Southampton and Le Havre. If Wales were an independent country inside the European Union, it is difficult to imagine that it would be neglected in this way by the European Commission. A designated route along south Wales would bring significant economic benefits to the region, including to the communities I represent in Carmarthenshire, as well as the future development of Milford Haven as a port.

Having spoken to representatives of the Milford Haven Port authority, I understand that Milford Haven meets all the requirements of the European Commission. It is among Europe’s largest 80 ports and handles cargo of more than 43 million tonnes. It is a core link between the Republic of Ireland and Europe. Does the UK Government’s refusal of the connecting Europe facility mean that west Wales is being let down not just by the European commissioners, but by the London Government who are not fighting for the necessary improvements?

The UK Government will know that I have been a keen supporter of the electrification of the great western line not just to Swansea, but further to the west of Wales, and especially through my constituency in Carmarthenshire. It remains a disgrace on the part of the British state that while Glasgow to London was electrified as far back as 1974, the electrification from London, even as far as Cardiff, still remains in the planning stages and about 80% of even that electrification will take place in England.

Electrification is one of the criteria for rail in the comprehensive network, yet electrification of the north Wales coast line or the great western main line west of Cardiff are apparently not up for discussion—even though these would largely qualify for cohesion fund support. I hope this clarifies my response to the hon. Member for St Albans (Mrs Main). To what extent was this considered when the business case for electrification to south Wales was put forward, particularly with regard to the port of Milford Haven? Given the answers I have received to written parliamentary questions since May 2010, I imagine that little thought has been put into this proposal, as no estimate has been made of the cost of electrification for the areas past Swansea, despite the importance of the ports of Fishguard and Milford Haven. Rail connection from London through Bristol, Cardiff and Swansea itself is, in the annex to the proposal of 24 October 2011, identified as part of corridor 8, and it is described as “upgrading”.

We know, of course, that without a U-turn from the UK Government the electrification will go only as far as Cardiff. The European Commission thinks that electrification to Swansea is important as part of Europe-wide rail and transport links, but the UK Government do not, it seems. In a nutshell, here is one reason why my party prefers full member status within the European Union to the present constitutional position. While the EU shows interest in cross-European co-operation and investment, UK policy in recent decades has been increasingly to concentrate on promoting one part of the British state down here in London.

As to the remainder of the proposals, we welcome the support provision for telecommunications in the Commission’s recommendations. When we were in government in Wales, the increase in broadband across Wales was a major plank of my party’s economic renewal plan. Improved telecommunications allows Welsh businesses and Welsh customers to be at the heart of Europe in a way that occasionally our geography does not. That applies particularly to digital connectedness in rural areas such as my own constituency. Will the Government confirm that, despite their opposition to the proposals in the Commission’s draft regulations, the digital facilities in Wales will be at least as good as the goals identified in the digital agenda for Europe and that support for cross-EU help for businesses and individuals will be similarly provided?

On energy, we support the fastest possible and credible reduction in carbon dioxide emissions and a switch to renewable energies from fossil fuels. It is only a shame that Wales is not an independent country able to control its own energy mix and that major energy decisions are made for us instead here in London—either via the Infrastructure Planning Commission or in future by the Secretary of State for Energy and Climate Change. As a country, we generate more electricity than we consume, so transmission is always a very important issue. I must refer once again to Milford Haven—an important energy portal where liquefied natural gas is imported from across the world.

To conclude, my party’s policy throughout the economic crisis since 2007 has been to argue that capital infrastructure spending is vital for the revival of the economy in both the short and longer term—maintaining the construction industry in the short term and increasing opportunities for the future. In Wales—a country that has the same amount of electrified railway as Albania and Moldova, and whose transport infrastructure is geared to move extremely slowly from east to west and not from north to south—infrastructure investment is important.

Wales sees many benefits from the European Union, not least from the common agricultural policy and from the cohesion fund. However, these proposals from the European Commission do not go far enough in supporting infrastructure improvements in Wales, yet they are ironically being rejected by the UK Government because they involve spending too much. I call on various Ministers in this place and in the Welsh Government to work together with the Commission, the Council and the European Parliament to achieve a better deal for Wales in the connecting Europe facility.

13:39

[Penny Mordaunt (Portsmouth North) (Con)]

I welcome the Government’s approach to this and connected issues. I agree that large increases in EU spending are not acceptable at present, and that they jar with the necessary and tough measures required by member states to tackle their deficits. Measures that would impose substantial bureaucracy and associated costs on member states, and on our local authorities and businesses, are both unwelcome and unnecessary. Allowing such decisions to remain with member states would not erect a barrier to the progress of schemes that would benefit the single market.

It will come as no surprise to many Members who are present, particularly the Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), that I intend to speak mainly about funds for the core and comprehensive transport networks, as I never need much excuse to start talking about trains. The main purpose of the funds is to promote co-operation and co-ordination. We need only look back to the early days of rail to see that that is very important. In the 1870s, the Great Western Railway was busily laying a gauge of 7 feet while every other company was busily laying gauges of 4 feet 8 inches, and better planning would certainly have saved Brunel and his contemporaries a lot of grief, but such co-operation does not require us to pay into a centrally administered fund. We should spend the money on projects that benefit the UK directly, which would not preclude co-operation.

Transport spending must be directed towards projects that will support growth and investment in member states, but that should be a matter for individual member states. The Government are prioritising new projects that will yield a substantial return on investment, such as High Speed 2, Crossrail, Thameslink and, in order to make faster journeys possible, the electrification of key routes such as the First Great Western service between London and Cardiff, the First TransPennine Express route from York, Leeds and Manchester, and services between Liverpool, Preston and Manchester. Many of the schemes are controversial, and following consultation the Government have made changes. What chance would our citizens have to influence such schemes if the decisions were not made by the Governments of member states?

As well as yielding a good return on investment, the Government’s schemes will reduce the impact on the environment, and the aim will be to keep pace with public demand in terms of both capacity and quality. Other member states should be doing likewise. I am concerned about the idea of the UK’s paying into a fund and receiving very little back, in the form of either infrastructure or benefit from a scheme in another member state. I think that that is true of any member state, but our geography makes it doubly true of us.

According to my quick and dirty assessment, given the focus on the missing border links scheme and other measures intended to support growth in the single market, many schemes favoured by the UK would be very low in the pecking order were the Commission’s proposal to proceed. Moreover, member states would be given no incentive to put their own houses in order and prioritise spending, because some of the criteria for the operation of the fund would be skewed towards states that had continually failed to get to grips with balancing their books and controlling their spending.

As Ministers will know, my hobby horse extends beyond greener and faster transport to comfort standards and the opportunity presented by rail franchises. The Financial Secretary to the Treasury, who is a neighbour of mine, will know of the campaign to prevent South West Trains from continually replacing rolling stock that it should be using for main line services with substandard suburban stock. Those issues are not as high-profile or sexy as the issue of new routes, but they are very important to the public, and they affect the viability of particular modes of passenger transport as much as new routes.

In a short space of time, franchise agreements and many other factors will present us with real opportunities. We need to seize those opportunities, and given that they will be time-sensitive, the more healthy our financial position and the more flexibility we have in making decisions and attracting investors, the better. I am firmly in favour of member states retaining as much control as possible over these investment funds.

13:44

[Kelvin Hopkins (Luton North) (Lab)]

I strongly support the amendment and its heavy emphasis on growth, because growth is the way to reduce deficits. Members who have seen The Independent today will know that our deficit is rather lower than those of many other major European member states, and that our biggest debt is located in the banks rather than in state spending. The fact remains, however, that the way to lower deficits is to achieve growth. Creating employment and ensuring that people pay taxes rather than living on benefits is the way forward.

I agreed with most of what was said by the hon. Member for South Northamptonshire (Andrea Leadsom), who is no longer in the Chamber. In particular, I agreed with the hon. Member for Portsmouth North (Penny Mordaunt), who pointed out that we do not need the European Union or the European Commission to tell member states what they need and what they should build, and to spend our money for us. Member states themselves know best what they need, and what should be done to meet those needs. International co-ordination is best achieved through bilateral and multilateral agreement and collaboration, rather than through the bureaucratic controls imposed by the European Union.

Big infrastructure has indeed been built by European national Governments, especially rail freight infrastructure. We have our own channel tunnel, which is a product not of the European Union but of a collaboration between France and Britain. We have the channel tunnel rail link, which is also nothing to do with the European Union. We have rail tunnels through the alps, built to a broad gauge that enables trains to carry lorries and double-stack containers and providing a freight link from southern to northern Europe. Those were built by states using state funds. The Brenner pass, a 28-mile tunnel built to a broad gauge through faulted rock, also carries freight between northern and southern Europe, and it too is the work of member states rather than the European Union. We have the Betuweroute, another broad-gauge freight route linking Rotterdam to the Ruhr. When I visited it, I asked who had paid for it. I was told, “The Dutch Government, of course.” The state bears the cost, not the European Union.

We know that the EU offers token amounts to investment projects to try to confer some relevance, presence and significance on itself, but that is not the real deal. The real deal is that states decide what they want and need and pay for it—sometimes with private finance, but largely with state funds—and, on occasion, collaborate with neighbouring states to ensure that things work well.

What the United Kingdom needs is investment in a dedicated rail freight line from the channel tunnel to Glasgow. Although we are somewhat peripheral to the continent in geographical terms, we need to be linked with its economy. I refer to the continent rather than the European Union because we are talking about the whole continent, which extends beyond the bounds of the European Union as it is currently constituted.

We need to be linked to the continent by freight as well as passenger rail, and that will be possible only if the delivery system on this side of the channel is capable of taking trains carrying lorries and full-scale and double-stack containers, and, indeed, continental-gauge trains, which cannot gain access to our platforms or our tunnels. In fact, I have been involved with a scheme—which I have mentioned in the Chamber a number of times in the past—to build a line from the channel tunnel to Glasgow, linking all the major conurbations of Britain and capable of doing all the things that I have just mentioned.

[Mr Bone]

The hon. Gentleman is making an enormously powerful speech, as he normally does on these issues. Does he share my concern about the fact that, although members of his party and the nationalist parties have been in the Chamber today and the Conservative Benches are full, not a single Liberal Democrat Member has been present? Given that the Liberal Democrats make such a fuss about Europe and restrict what the coalition can do about it, where on earth are they?

[Kelvin Hopkins]

The hon. Gentleman makes a good point, but I have to say that the Liberal Democrats are in a coalition with his own party. It is his grief rather than ours, I think, so I will not intrude.

To an extent, work on a dedicated rail freight line has already begun. A terminal at Barking is taking trains from as far afield as Poland. However, although they can travel as far as Barking using the channel tunnel rail link, they can proceed no further because the gauge will not allow it.

According to an old chestnut, if we build HS2 we shall be able to take the passengers off the west coast main line and free it up for freight, but making that line capable of taking continental-gauge trains, double-stack containers and lorries would be prohibitively expensive. We need to build a line to take the freight off the west and east coast main lines and off our roads, so that the lines can be freed up for more and faster passenger trains and we can provide more capacity for passengers travelling to the north while taking as much traffic as possible off the roads. It is estimated that we could take 5 million lorry journeys off our roads simply by building that route, which would be economically viable and cheap to build.

The scheme has a precise route that uses old track bed and under-used lines, and requires only 14 miles of new track, mostly in tunnels. It will be easy to construct, it will not cause any environmental problems as the track bed is already there and it will be cheap to build. Some estimate that the whole route will cost as little as less than £4 billion. We have put in an estimate of £6 billion, which is still a third or so of what we will spend on Crossrail—I support Crossrail—and a tiny fraction of what will be spent on HS2, yet we would get an enormous advantage to our economy and transform road transport in Britain as we would not get the road damage caused by lorries, as the freight would be on trains instead.

The scheme would attractive to hauliers because they would not need to worry about drivers’ hours problems. They could put their lorry trailers on trains in Glasgow, south Lancashire, south Yorkshire or the north-east and, eventually, in the south-west and south Wales, and overcome such problems. On the question of unemployment, there is a shortage of long-distance lorry drivers because it is not a popular job. It takes people away from home and it is very difficult. The little group proposing the scheme even has a major haulier working with it.

That scheme is what Britain needs. It has nothing to do with the European Union, which would not pay for it—we would. It would offer value for money, it would be profitable and economical and it is vital for our future. I hope that both the Government and my hon. Friends on the Front Bench will listen carefully to our suggestion.

13:51

[Charlie Elphicke (Dover) (Con)]

I, too, support the motion, although it is, as always, a pleasure to follow my hon. Friend the Member for Luton North (Kelvin Hopkins), with whom I sit on the Select Committee. I support very many of his considered views on Europe.

This strikes me as a classic European measure with excessive spending, excessive bureaucracy and excessive meddling. As the Minister said, the amount required will shoot up from about €7 billion to €50 billion. That is excessive at a time when no sensible Government and no sensible European Union or Commission would want to increase spending.

Another thing that I find extraordinarily bizarre is the idea of a core network, core corridors and corridor co-ordinators. It is yet another nascent European bureaucracy to build up extra numbers of people in Brussels and large programme management costs, and it seems to me to offend against the principle of subsidiarity—as has been said, this should be done more nationally—and to feed the unnecessary bureaucracy in Brussels. The key question, to my mind, is the concern that the so-called corridor co-ordinators who seem to have crept in could become corridor meddlers and start telling member states what to do, issuing directions and making orders. That is entirely undesirable.

It is much better for there to be co-operation between nations, which is the principal reason I wanted to speak. There is a lot to be said for nations working together on cross-border transport corridors. The draft proposals— beautifully and lucidly set out in the explanatory memorandum that the Minister of State tabled last November—talk about core network corridors, which the Commission defines as

“an instrument to implement the Core Network. Each Corridor must involve at least three Member States. Will be based on modal integration and interoperability and have a coordinated development plan and management structure.”

That is classic European-speak. I do not think that that needs to be done by the European Commission; it could be done by the UK and individual nations, working to improve cross-border networks. That is particularly important for the transport networks in Kent, which join the rest of the continent to our country and our transport networks so well.

My principal concern is that for many years there has been under-investment in those networks. We have the M20, which is a kind of concrete motorway, and the A2, which has been waiting to be upgraded. On the continent, likewise, the road network, as anyone who has travelled there knows, could be better. A key area for cross-border co-operation could be for the UK Government to consider how those networks could be improved along with the French, the Belgians and the Dunkirk port. A map of Europe shows the so-called golden banana stretching from south-east England towards lower Bavaria, at the heart of which is the Dover strait and the Dover-Calais crossing. Indeed, the Dover-Dunkirk crossing is an important part of the communication and trading links that are so important to our nation’s prosperity and to that of Europe.

If, despite our warnings in today’s debate, the fund is to be extended as suggested, it should not be invested in rail networks in Romania, as my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) suggested it might be, but in upgrading international transport links between the UK and other countries in the so-called golden banana to help Europe to grow. It is important that we have more growth in Europe and that we support first the area that can provide the value added and recovery generation to drive our European economy forward. My plea to the Financial Secretary and to the Minister of State is to meet me to discuss what we can do in Kent to make the case to France and our friends in Belgium, to ensure that we at least get a fair part of the fund to see whether we can improve the transport networks in Kent and take forward the lower Thames crossing.

13:57

[Mr William Cash (Stone) (Con)]

The problem with this over-arching proposal is basically that it will be carried by qualified majority vote and is therefore, in effect, a form of taxation. Whatever proportion of that overall budget of £43.7 billion eventually falls on the United Kingdom, the Committee of which I have the honour to serve as Chairman believes that the scale of the Commission’s ambition for the 2014 to 2020 financial period is clearly unacceptable. On that basis, there is no doubt that the thrust of the Government’s motion is correct.

Although I happen to agree with the proposals on growth in the Opposition motion, the fact is that the Opposition are guilty of having severely restricted any opportunity for growth through the massive increase in public expenditure that they imposed on the United Kingdom. I and two or three other Conservative Members continually attacked that increase for the best part of three years and, as I repeatedly said at the time, there was no proposal for growth, which was connected to the problems of over-regulation, of which these proposals are yet another example.

The truth is that there should have been a full debate—there still may be opportunity for such a debate—on what is going wrong with the European Union as a whole. That debate is necessary because, as the Government have pointed out, the EU is calling on member states such as ourselves to produce more money for projects that could be better carried out under the so-called principle of subsidiarity at a national level.

At the same time, it is abundantly clear that there is no money in the European coffers. We should be debating the eurozone crisis as a whole in a three-hour debate on the Floor of the House, which my Committee has unanimously called on the Government to provide, but when I and my hon. Friends the Members for Gainsborough (Mr Leigh) and for Bury North (Mr Nuttall) repeated our calls this morning for a general debate it was denied by the Government, yet again.

[Mr Bone]

On that point, the Backbench Business Committee can, of course, grant a full-day debate on Thursday of next week if the Government release that day, which they are holding back for a general debate. Would my hon. Friend urge the Chief Whip to consider doing that?

[Mr Cash]

I certainly would. I endorse that course of action, and I would be grateful if the Whips on duty would pass that message to the Chief Whip—and, indeed, the Leader of the House—because we are faced with a monumental crisis in the European Union. That is only a symptom of the problem, which is generated by the intrinsic defects of the accumulated treaties, particularly since the Maastricht treaty in the 1990s.

So much is decided by qualified majority vote despite the fact that we currently face such severe restrictions and so much austerity, which is causing difficulties for our hospitals, schools, transport and so much else. Proportionality in respect of allocations is required. Getting that balance right is vital for our national interest. We should therefore have a debate on the Floor of the House, and not only on this one issue, important though it is.

I attended the multiannual financial meeting of about eight weeks ago as a member of the European Scrutiny Committee on behalf of the United Kingdom national Parliament, and I felt compelled to get up and complain bitterly about the complete “Alice in Wonderland” attitude that prevailed there. People were calling for an ever-greater increase in the amount of money that should be made available to the EU, and they were justifying that by reference to the Lisbon treaty, for example. They said that as the functions had grown, there ought to be more money. There is absolutely no recognition of the fact that there is simply not enough money to go around. We should be proceeding on the basis that we must reduce, rather than merely freeze, the budget.

The Government motion is right, therefore. However, we are facing demands from the financial transaction tax—I accept that we can veto that—and there are also attempts to stop our rebate and proposals to increase own-resources. Cumulatively, those moves are putting pressure on us to move in the wrong direction. There are great opportunities for the UK in a trading environment that is global—across the world, rather than just in the EU, important though that may be—and that is the direction we should be going in. All transport issues, including aviation policy and the development of our local infrastructure, should be taken by ourselves in the interests of the UK, rather than determined by QMV involving the other member states.

The European project is completely misconceived, and it is failing; the eurozone crisis will ultimately lead to collapse. The current situation is rather like the phoney war of 1938 and 1939: everybody knows the situation is doomed, but they are continuing to pretend that somehow something will turn up.

My message is that the Government motion is right in general, but that there is not enough determination to renegotiate the treaties. I welcome the veto, but once we cross the Rubicon, we cannot cross back. The reality is that any attempt to do so will meet with disaster, division and acrimony.

I am glad that we have had this debate, but there are also more important matters that must be debated as a matter of urgency. As I and my hon. Friends the Members for Gainsborough, for Wellingborough (Mr Bone), for Bury North and many others have said, we must have a proper debate on the extent, range and depth of the eurozone crisis and its impact on the UK.

We must also explore the other key issues facing us, such as why we are being confronted with QMV decisions to impose what is, in effect, a form of taxation to provide for certain facilities. Such decisions should be made on a bilateral national basis. It is not anti-European to say that is what we should do, because doing that is in the interests of Europe. What Europe is doing, however, is determinedly pursuing a completely false prospectus and then compounding that—sadly, with our Government in agreement, it appears—by proposing that we should find yet more devious means of providing money through the IMF to support what is an insupportable project. That simply flies in the face of common sense.

14:05

[Mr Peter Bone (Wellingborough) (Con)]

It is a great pleasure to follow my hon. Friend the Member for Stone (Mr Cash), who is, as ever, absolutely right in all he says.

On the issue of our having a day-long debate on Europe, I am pleased the Deputy Leader of the House is present. The Leader of the House is right that the Backbench Business Committee has been given the authority to authorise debates. If we were to have a bid for such a debate at one of our Committee meetings—which are held on Tuesdays at 1 o’clock—I think it would be given very careful consideration. The problem we have is that the Government do not allocate days to us far in advance. From what the Leader of the House said, we know that Thursday of next week has been allocated for a general debate, although at present a general debate in Government time. If the Government were to release that to the Backbench Business Committee, we could consider this question on Tuesday, and if there was a representation from my hon. Friend the Member for Stone—and, perhaps, other Members—we could have such a debate on Europe.

It concerns me that so few Liberal Democrat Members are present for the debate on this motion. I am not concerned that we are missing their contributions, because what they would say would not be worth hearing. My concern is that they might be boycotting again. Is this the Deputy Prime Minister’s attempt to have another boycott?

[Mr Clappison]

The general debate that my hon. Friend is arguing for is directly relevant to the motion, because tens of billions of pounds in extra expenditure will have to be found, and a large and disproportionate amount of that will have to come from this country. Some of that will come out of general taxation under the funding mechanism for the EU, adding to our indebtedness—and presumably other member states will face a similar situation.

[Mr Bone]

My hon. Friend is absolutely right.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

As he always is.

[Mr Bone]

I concur with that remark, of course.

I do not blame any Member currently sitting on the Opposition Front Bench for this, but the real scandal of the last Labour Government is what Tony Blair did. I do not blame Mr Blair either, because he may well have believed at the time that what he was saying was true. He stood at the Dispatch Box and gave away an enormous amount of Mrs Thatcher’s rebate, which has led to an enormous increase in the amount we are having to contribute to the EU budget. He believed that would not happen because there would be major reform of the common agricultural policy. That has not happened, but I give him the benefit of the doubt on that. The Labour Front-Bench team may well support Mr Blair’s original position, so will the Labour Opposition and the splendid ministerial team we have combine and go to Europe and say to them, “Because you haven’t kept your part of the bargain in reforming the CAP, we will only pay the amount of money we were paying under the previous Government”? The sum in question is £19 billion over a five-year period. That is an enormous amount of money to join a club that does nothing for this country. But if we kept to that £19 billion, we would free up more than £21 billion during this Conservative coalition Government.

Many hon. Members have talked about growth, but nobody has really suggested how it could be achieved. I suggest that the £21 billion of extra money that would come to the Government as a result of paying only the amount that we were paying previously could be used either for tax cuts, which would be my preference, or for infrastructure plans, as the hon. Members for Luton North (Kelvin Hopkins) and for Carmarthen East and Dinefwr (Jonathan Edwards) were suggesting. Alternatively, some of the money could go on tax cuts and some could go on infrastructure. That would not cost the taxpayer a penny, because all we would be saying to Europe would be, “We are paying just the £19 billion over five years as the ridiculous amount of money for our subscription to the European Union.” So instead of paying £41 billion for joining this club we would be paying £19 billion. If hon. Members think that I am being unfair to the European Union on this point, they should consider the reality of what happens. This is not just about the £7 billion or £10 billion that our “net contribution” is each year, because the EU actually takes £14 billion or £15 billion. [Hon. Members: “£18 billion.”] Oh, it has gone up. The money goes to the European Commission, which then gives some of it back to be spent on its pet projects, which it thinks should be what we want in this country—we should have control of that.

[Jacob Rees-Mogg]

What is even worse is that the EU, when it has spent our money, then has the cheek to fine people for failing to fly the European flag. The way in which it wastes British taxpayers’ money is absolutely disgraceful.

[Mr Bone]

Of course my hon. Friend makes eminent sense, as always.

There is something even more worrying about this situation: all these billions of pounds are going into the European Union but it cannot even get its auditors to give it a clean bill of health—the accounts are rejected year after year. We would not give money to any other organisation—in this country—that did not have audited accounts.

[Mr Clappison]

My hon. Friend is raising an interesting point about how much of this money, were it to be granted—I hope it is not—is likely to be spent in this country. Has it escaped his eagle eye that a substantial proportion of the money referred to in the documents before the House—€10 billion-worth—is ring-fenced for the cohesion countries, and so not a single penny of that can come to this country? I have looked at these documents and if they are approved—I hope they will not be—it appears unlikely that very much money would come to this country as a result.

[Mr Bone]

That point was made eloquently in the debate earlier, and I noted with interest that only two regions in this country would benefit from any of that funding. My objection is not at all to what the Government are doing in this motion—it is a fine motion and in recent months the Government have been absolutely spot on. I will not say when they started to change their position on this—[Interruption.] If Ministers want to know when they changed it, I shall tell them. I believe it was after that little vote on a Backbench Business Committee motion when there was some division within the Conservative party. I urge all Members to support the Government today and oppose Labour’s opportunistic amendment—let us win handsomely.

Question put, That the amendment be made.

14:14

Division 427

Ayes: 182

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Labour: 180
Green Party: 1

Noes: 281

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Conservative: 240
Liberal Democrat: 36
Scottish National Party: 3
Plaid Cymru: 1

Main Question put and agreed to.

Resolved,

That this House takes note of European Union Documents No. 16176/11 and Addenda 1 and 2, No. 16499/11, No. 16006/11 and Addenda 1 and 2, No. 15629/11 and Addenda 1 to 35, No. 15813/11 and Addenda 1 and 2, relating to the European Commission’s draft regulations on the Connecting Europe Facility in the next Multiannual Financial Framework 2014-20; supports the Government’s view that at a time of ongoing economic fragility in Europe and tight constraints on domestic public spending, the Commission’s proposal for substantial increases in EU spending in this area compared with current spend is unacceptable and incompatible with the tough decisions being taken to bring deficits under control in both the UK and countries across Europe; considers that spending in this area should focus on identifying and providing genuine EU-added value, and not on spending where domestic governments and the market are better placed to act; and further supports the Government’s ongoing efforts to reduce both the Commission’s proposed budget for the Connecting Europe Facility and the overall level of spending in the next Multiannual Financial Framework 2014-20.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Could those Members who are not staying for the next debate please leave the Chamber quickly and quietly?