Draft European Union Budget

Baroness Hoey Excerpts

Thursday 12th July 2012 Commons Chamber

[Chris Leslie]

The hon. Gentleman was perfectly free to table his own amendment, and he pitches a perfectly respectable position. I thought that it was important to draw the Government into adopting a stronger stance, and a reduction in real terms is, at the very least, the place where we need to see the Government, but we could not get them even to that point. He has seen the motion; it falls short in so many ways.

Real-terms cuts are required now to the EU administrative budget, because in the UK we are in a double-dip recession, thanks in part to the Government’s failure on economic growth. The economy shrank in the last quarter of 2011 by 0.4%, and in the first quarter of this calendar year by 0.3%. Borrowing hit £18 billion in May, up £3 billion on the same month last year, and pressures on the UK’s finances are increasing: domestic tax revenues have fallen and income tax receipts are 7.3% down on the year to May. Today the Office for Budget Responsibility, in its fiscal sustainability report, cites projections suggesting that the public finances are likely to come under pressure in the longer term, and states:

“In the absence of offsetting tax increases or spending cuts this would widen budget deficits over time and eventually put public sector net debt on an unsustainable upward trajectory.”

There is much more evidence than ever before of the need for us to strengthen the Government’s negotiating stance. That is why it is just not good enough for the Government to say, “There’s not much we can do about it. It’s a qualified majority vote this year. We’re in a terribly difficult position,” and why in our amendment we have, sadly, had to point out that the Government have failed to win alliances for a tougher position on the budget. That is where we are today.

There was the phantom veto in December last year, when nothing was actually vetoed—everything went through with the agreement of the other EU countries, and the Prime Minister succeeded simply in alienating the UK’s negotiating position. Now, when we need to make strong arguments about reducing budgets, few are listening and open to ideas because of the stance taken by the Prime Minister in those negotiations.

[Kate Hoey (Vauxhall) (Lab)]

I want whoever is in power in this country to negotiate over our budget in a much tougher way. Does my hon. Friend agree that perhaps the only way for us to get the European Union to take us seriously is to say that we will not pay any more than what we think is a fair contribution and increase? Indeed, given all the waste, there should be not an increase, but a decrease.

[Chris Leslie]

That is why we need to change the approach of Ministers in negotiations. We have to come to a settlement. This year, we are on the cusp of Ministers having a veto power over the seven-year spending review period. This is the moment when we need them to be particularly firm.

--- Later in debate ---

[Chris Heaton-Harris]

If it was done as a simple transaction, that would be the case.

The Commission’s budgetary expenditure is divided into five headings. “Sustainable Growth”, which mainly involves the EU structural funds, and “Preservation and Management of Natural Resources”, which relates to agriculture and the environment, are the biggest items and accounted for 87% of EU spending in 2012. “Citizenship, freedom, security and justice”, which relates to social policy, crime and policing, and “The EU as a global player”, which involves foreign policy issues, were the smaller items of the budget. The heading, “Administration”, relates to the finances of the staff of the European Commission and other institutional expenditure, such as that of the European Parliament, the Committee of the Regions, the Economic and Social Committee and various other EU agencies and quangos.

[Kate Hoey]

I hope that the hon. Gentleman’s attention has been drawn to the wonderful little DVD that has been sent to a number of Members by Marta Andreasen, who has done a terrific job of showing all the waste that has gone on and how massive amounts of taxpayers’ money are being wasted. If we stopped that waste, we would not have to increase the budget, but could cut it. Would he like to ensure that every Member of Parliament can see the DVD?

[Chris Heaton-Harris]

It is not often that I would commend anything to do with a politician from the UK Independence party. However, if we look at the front page of the Financial Times from 1 August 2002, we see sitting beside Marta Andreasen at the press conference one of the MEPs for the East Midlands, who is now the MP for Daventry. She was the first person to hold the role of chief accountant of the European Commission who had an accountancy qualification. I am very keen that her expertise is shared. I have seen the DVD and it is well worth looking at.

The Minister set out some obstacles to the reform of the budget, and they are great. When there are big vested interests, with big countries getting way more money out than they will ever put in, there is no chance of reducing the budget under qualified majority voting. As I have tried to explain, we are one of the biggest net contributors, and we will continue to be so way into the future. However, we will always be outvoted on budgetary matters under qualified majority voting, because more countries gain from our expenditure than pay themselves.

Blocs exist to protect certain things. There is the bloc of net gainers, but France, which is a net contributor, exists in another bloc to protect one of the big areas of spending: the common agricultural policy. It does not want any major changes to the CAP, because that is how it diminishes its net payments to the EU. With such vested interests built in, reform of the European budget is much easier said that done, as the Opposition prove in their amendment.

Another problem with the EU budget is that its own auditors do not sign it off. This is the 17th consecutive year in which the European Court of Auditors, having checked the legality of EU spending, has refused to give it what is called a positive statement of assurance. Essentially, it has refused to sign off the accounts. As the Financial Secretary said, we must consider that alongside the fact that the European Commission constantly asks for much more money to spend but then cannot spend it properly. Until recently, it was running up massive surpluses in its own accounts.

There are also aberrations that people do not like. The latest is that we are told that EU chiefs are splashing out on a new £350 million headquarters, at a time when everybody else is having to cut their budgets. That new headquarters, by the way, is in Luxembourg, where MEPs no longer go because they are based in Brussels and Strasbourg. There is obviously too much money in the system. The case for reform is therefore greater now than it has ever been.

Although the European Council will not formally adopt its position on the European Commission’s proposed EU budget for 2013 until 26 July, member states’ ambassadors to the EU reached a deal on it yesterday, as the Financial Secretary mentioned. The Commission has proposed an overall 6.8% increase in payment appropriations compared with 2012, which amounts to about £7.2 billion—a decent sum. As he said, the member states’ position agreed yesterday means a £2.9 billion increase in payments. That is an increase of 2.79%, which can be compared with the EU inflation rate of 1.9%.

The Financial Secretary and I know that the UK, the Netherlands and Sweden all oppose the deal and will vote against it at the Council on 26 July. However, if we are the only three states to do so, the budget will be adopted by a qualified majority of countries in the blocs that I outlined, which want to receive more than they put in. If the estimated UK gross contribution of 11.3% to the 2012 EU budget were replicated, under yesterday’s deal the UK would pay about £12.2 billion gross into the budget next year.

Essentially, we are just about to increase the EU budget, and our part of that increase is £330 million. That would pay a year’s basic salary to 18,500 Army privates, the average basic salary to 10,500 NHS-qualified nurses, or a year’s basic salary to 12,500 police constables.

Section 5 of the European Communities (Amendment) Act 1993

Baroness Hoey Excerpts

Tuesday 24th April 2012 Commons Chamber

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

I beg to move,

That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the UK’s Convergence Programme.

I welcome this opportunity to debate the information that will be provided to the European Commission this year under section 5 of the European Communities (Amendment) Act 1993. As in previous years, the Government will send to the Commission data on the UK’s economic and budgetary position, in line with our commitments under the EU stability and growth pact.

The Government will submit their convergence programme by 30 April, after debates in both Houses. It explains our medium-term fiscal policies, as set out in the autumn statement, the Budget and the Office for Budget Responsibility’s forecasts, and it is drawn entirely from previously published documents that have been presented to Parliament. It makes it clear that this year’s Budget reinforces the Government’s determination to return the UK to prosperity, and it reiterates our No. 1 priority of tackling the huge deficit that we inherited from the previous Government.

It is because of the decisive action this Government have taken to tackle that deficit since the June 2010 Budget that we have secured and maintained the stability of the UK economy. Last month’s Budget builds on those strong foundations, safeguarding our economic stability; creating a fairer, more efficient and simpler tax system; and driving through reforms to unleash the private sector enterprise and ambition that are critical to our recovery.

As the Chancellor said in his Budget speech, Britain will earn its way in the world, but we can succeed in that goal only if we continue to safeguard our economic stability, tackling the record deficit and debt we inherited from the previous Government. That is why this year’s Budget has a neutral impact on the public finances, implementing fiscal consolidation as planned, and keeping us on course to achieve a balanced structural current budget by 2016-17 and debt falling as a percentage of national income by the end of this Parliament in 2015-16.

Fiscal sustainability is the vital precondition for economic success, but we are doing much more to catalyse growth. First and foremost, we are undertaking far-reaching reform to ensure that our tax system is simple, predictable and fair, and that it supports work.

[Kate Hoey (Vauxhall) (Lab)]

Given that the requirement for the Government’s assessment was passed under the Maastricht treaty, for which no one in the country voted, and that it must go to a Commission that no one in this country has elected, why does an independent British Parliament have to go through this procedure—this charade—every year?

[Mr Hoban]

We have signed up to certain aspects of the stability and growth pact. One precondition is that we present this information, as we have done every year since the Maastricht treaty. I will set out later why the UK is treated differently in this process from other European Union member states, but there is nothing new in the information that we will supply and it has been presented to the House. When the EU sought to revise its economic governance package, we were very clear that, whereas other member states provide information to the Commission in advance of their budget-setting process, the UK will provide it after our process.

--- Later in debate ---

[Mr Hoban]

I do not wish to pre-empt the Commission’s conclusion—it would be wrong to do so—but when other international organisations have looked at the Budget and the Government’s path to fiscal reform, they have clearly endorsed keeping to the path and sticking to the course. That is important. It has meant that we have retained the confidence of international markets, and interest rates are low as a consequence, which is to the benefit of households and businesses. That is vital to the programme of continued economic reform in the UK.

It is important that we discuss these matters with international partners and have a debate about economic policy in Europe, but at home we have to stick to the path required to deliver the necessary reforms. The Budget builds on the Government’s ambition to create a stable and prosperous economy, it shows our commitment to fiscal consolidation and economic growth, and, along with the OBR’s forecast, forms the basis of the UK’s convergence programme. We are taking the right path, and I hope that—

[Kate Hoey]

rose—

[Mr Hoban]

Oh, go on.

[Kate Hoey]

I want to be clear in my own mind, because obviously this is important. If the House was to say no to this tonight and say, “Actually, we don’t think it’s got anything to do with the Commission what we are doing in our independent country. We’re not part of the eurozone,” what would be the repercussions? What would it matter?

[Mr Hoban]

As I said, all the information in the convergence programme is already in the public domain. It was published at the time of the Budget by both the Treasury and the OBR, in accordance with our commitments.

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[Kelvin Hopkins]

Indeed, and I think many of the peoples of the European countries that are now suffering would like a referendum as well. What I find difficult to understand is why so many people in the countries facing difficulties still support the euro. I do not know why, because supporting membership of the euro is almost like having a death wish. If only there were some courageous politicians who could say, “The way out of our problems is to recreate our own currency, depreciate it against the countries we’re competing with and reflate behind that barrier,” those countries would start to solve their problems. However, they cannot do it because they are tied into the euro.

We have collective deflation, right across the entire European Union, and although this country is perhaps tinkering round the edges compared with some other countries, that is entirely the wrong way to go. One thing that is causing us problems at the moment is that the eurozone is in such trouble that the euro is now weakening, which, by contrast, is strengthening sterling and making life more difficult for our manufacturers. That is causing problems in many ways. However, if there were a sensible, managed deconstruction of the euro, with the re-creation of national currencies in many, or possibly all, of those countries, thereby allowing them to reflate their economies, they would benefit, as would we, and the whole European Union would then start to work properly—as a group of democratic, independent nations co-operating voluntarily for mutual benefit, rather than something driven by people in central banks or people in Brussels in the Commission.

[Kate Hoey]

I wonder whether my hon. Friend could give me an answer to the question I asked the Minister, to which he did not give me an answer. What are the repercussions for our country if we vote this motion down this evening, as I hope we will?

[Kelvin Hopkins]

I hope we do too. As for the repercussions, will we be taken to the European Court of Justice? I suppose that is what happens; however, I think the European Union has other things on its mind rather than punishing us for not sending the Red Book across to Brussels. It has more problems than it can deal with at the moment, and it will not be taking us to court simply for refusing to send across our Budget book, which it can buy in the shops anyway.

Remuneration of EU Staff

Baroness Hoey Excerpts

Tuesday 21st February 2012 Commons Chamber

[Sammy Wilson]

That is one reason why we get the kind of decisions we get from EU judges—whether they are about whom we can deport from the UK or about pay structures for EU civil servants.

Some will say that those who take my stance simply want to have a go at Europe. I have absolutely no hesitation in saying that I am a member of the Better Off Out group. I believe that we ought to loosen our ties with the EU so that it is what was originally intended—a free trade area, not a political entity. But I want to leave my political views aside for a moment. I am pleased that the Prime Minister has taken the stance that he has in recent days on Europe, and I hope that he does not weaken it. I hope that he keeps the strong backbone that he has shown. However, one way of hurting the EU is for us to say, “We’re not prepared to finance this grotesque behaviour in the face of the austerity affecting all the EU nations.”

[Kate Hoey (Vauxhall) (Lab)]

The hon. Gentleman need not feel alone. Does he not realise that 50%, if not more—a majority—of the public want a referendum on the EU, precisely because they want to return to the relationship that they thought they were voting for when they voted to join the original Common Market?

[Sammy Wilson]

I thank the hon. Lady for her intervention. If the Prime Minister wants his hand strengthened in his arguments with Europe on budgetary issues, and Europe’s interference with our courts and the rules affecting this country, one way of doing so is to have the backing of the people, in a referendum, for a different relationship with Europe. When one sees this kind of insular attitude being adopted, one understands why there will be increasing support for a referendum allowing for a change in the relationship.

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[Miss Smith]

Nor will I succumb to interventions that could take us far beyond the scope of today’s debate. I know, however, that the hon. Gentleman will be particularly pleased to hear that the lobby that we have put in place to give effect to our tough stance has already had an effect. For example, the Commission, having been put under pressure, is preparing to reduce European Union staff levels by 5% between 2014 and 2020.

Returning to the actions taken in the past year to deliver the agenda for EU administrative spending, and to what we are doing on staff regulations reform, I can tell the House that the UK has been a signatory to two joint letters calling on the Commission to deliver “significant” savings in EU administrative spending over the next multi-annual financial framework. One was signed by 17 member states, and it represents a strong blocking minority, which I know my hon. Friend the Member for Stone (Mr Cash)—who has moved from his place—will be happy to note. He will be pleased to know that we intend to hold that strong blocking minority together as we press for more specific changes to the way in which the EU institutions work.

I refer hon. Members to two more letters, one of which is dated 20 February 2012 and deals with a plan for growth in Europe. It has been signed by 12 European Union leaders, and it talks about the effort that we must all make to put our national and international finances on a sustainable footing. In the second, dated 18 December 2010, our Prime Minister and those of four other countries state that the challenge to the European Union is not to spend more but to spend better.

A number of questions were asked about the cost of court cases. The costs of the 2009 court case were met from existing Council budgets, as per normal standards. However, it is clearly not ideal to deal with these matters through court cases. Clearly we need to seek deeper reform, and that is what we are endeavouring to do. I was asked whether we should distinguish between high and low-earning EU staff. Other hon. Members have spoken eloquently about this today, notably in respect of the judiciary. EU officials fall into the category of highly paid officials, and we therefore think that they are a legitimate target for key financial savings.

My hon. Friend the Member for Stone asked whether the Government were taking a blocking minority on the 2010 EU budget discharge. I am afraid he is still not in his place to hear my answer, but I shall be happy to discuss it with him later. At ECOFIN today, the UK voted against that; it was not, in technical terms, a blocking minority.

My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) asked how the Commission could possibly not invoke this course of action, and said that the economic situation was patently a crisis. I know that he will welcome my agreeing with him on that. There is patently an economic crisis, and highly paid officials cannot be immune from that. I know that he will appreciate being reminded that the Delphic oracle talked about “nothing in excess”. I believe that that applies to EU salaries, and the House has eloquently agreed with me today.

Our debate today sends a clear signal that the Commission must take the challenge of modernising its institutions far more seriously and, most important, it must work harder to deliver efficiency savings in administration. Stopping an unjustified hike in EU staff pay is an obvious and good place to start, and our debate today sends a clear signal that we stand behind the principle outlined in the court case brought against the Commission for refusing to take action on the 2011 salary adjustment. Disputing higher staff pay in 2011 was not only the right thing to do; it also highlighted the fact that the current process is defunct and cannot adapt properly to difficult economic circumstances.

[Kate Hoey]

If the court rules in the wrong way, if there is no change, and if all our protests here come to nothing, does the Minister agree that no one in the European Union will listen unless the Government take back some of the money from the amount that we were going to pay? When are we going to do something practical to show that we mean what we say, rather than simply repeating all these warm words that never change anything?

[Miss Smith]

The hon. Lady makes a fine point. I want to reassure her that the Prime Minister has worked hard during the past year to take serious action, and the Chancellor has taken serious action at ECOFIN today to demonstrate how seriously we take the improvement of the way in which the EU budget is managed and spent. The action that she suggests might be at the far end of the spectrum, but we take the full agenda very seriously none the less. We are resolved to lobby hard for cuts to EU administrative spending in future years, as part of the real freeze in the overall EU budget over the next framework. I commend the motion to the House.

Question put and agreed to.

Financial Services bill (programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the Order of 6 February (Financial Services Bill (Programme)) be varied, in paragraph 2, by the substitution for Tuesday 20 March of Thursday 22 March.—(Mr Dunne.)

Question agreed to.

Finance (No. 3) Bill

Baroness Hoey Excerpts

Monday 4th July 2011 Commons Chamber

[Mr Gauke]

This Government believe in localism. I do not know whether the hon. Gentleman wants to return to the days when local authorities were highly prescribed as to how they could spend money and everything was ring-fenced, but that is not how we want to operate.

[Kate Hoey (Vauxhall) (Lab)]

The Minister said earlier that the Government had specifically given this money to local authorities. If we are now hearing that authorities—of all political persuasions, perhaps—such as that of my hon. Friend the Member for North Tyneside (Mrs Glindon) have not been paying it as they should, will the Government take that money back?

[Mr Gauke]

No. The funding settlement with local authorities was made on the basis that the money would be available for them to pay to low-paid public sector workers, but it is ultimately their decision.

Returning to the amendment of the right hon. Member for Birkenhead, I understand that it is intended to help enforce the Government’s policies, and I am sure he intends to be helpful. However, we do not believe that using the tax system is the right way to address this; we do not think that will be practical. It would add complexity to the tax system, and I therefore urge him to withdraw the amendment, especially as I know he will return to this subject at a later date.

Scotland Bill

Baroness Hoey Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr Gauke]

I do not think it an unprecedented statement. I am sure that the hon. Gentleman and I have served on many a Committee where that has been suggested. I wait to hear how persuasive the case is, but I suspect that I will not be persuaded, and that, to some extent, the amendments may be probing. We await the arguments, and I look forward to them.

New clause 8, tabled by the right hon. Member for Birkenhead (Mr Field), has two purposes. First, it seeks to legislate for the Chancellor, within six months of the day on which the Bill is passed, to

“lay before the House a report on the formula for allocating funds from the Consolidated Fund to the Scottish Government, and the alternative ways of calculating the sums to be paid.”

Secondly, it would require that within

“six weeks of laying that report…the Chancellor…lay before the House proposals for a new…formula which would ensure that the funds allocated to the Scottish Government are no more than 5 per cent. below or above the equivalent figure for each of the other nations of the UK.”

As hon. Members know, the formula for allocating funds from the Consolidated Fund to the Scottish Government is known as the Barnett formula, and as hon. Members will recall, the Bill seeks to increase the accountability of the Scottish Parliament to its people by devolving fiscal powers from Whitehall to Holyrood, and deducting a corresponding amount from Scotland’s block grant.

The Bill does not change the level of funding for Scotland. Future decisions taken by Scottish Ministers will affect the overall funding for Scotland’s public services, because Scottish Ministers will decide whether to increase or decrease devolved taxes relative to the UK. Reforming the Barnett formula is an entirely separate issue from those we are considering in the Bill, and one that the Calman commission did not make any recommendations on. The current formula is an administrative procedure and does not appear in legislation. It is not specific to Scotland, but is a mechanism for allocating funding across all four countries of the UK, so it would not be appropriate to legislate to alter it for Scotland in isolation. The Bill would not be an appropriate place for that

[Kate Hoey (Vauxhall) (Lab)]

I understand why the Minister does not think that discussion of the Barnett formula is appropriate for this evening’s debate, but my constituents feel strongly about the fact that Scotland gets so much more than they do generally. What mechanism could we use to have the Barnett formula looked at?

[Mr Gauke]

Partly following the strictures of the hon. Member for Dundee East, I would say that I am loth, at this stage of the debate, to make strong recommendations to the House about which new clauses should be accepted and which should be withdrawn and so on. I simply want to provide the context and argue why the Barnett formula should not be addressed in the Bill. I appreciate that there is a wide range of views on this issue, and that there are strong feelings throughout the UK. I dare say that a number of those views will be expressed this evening—indeed, this debate provides an opportunity for it. At this stage, however, I just want to draw the House’s attention to some of the difficulties with trying to address the matter in the Bill. I shall turn to the substance of the debate in a moment, but that is what I am seeking to do at the moment.

--- Later in debate ---

[Ann McKechin]

I welcome the very wise remarks of the hon. Member for Milton Keynes South (Iain Stewart). He always provides us with great expertise on Barnett formula issues, and on the point about having hard evidence, because one key component of our debate about the Bill has been the evidence for the various fiscal arguments that have been proffered over the past few months.

Borrowing powers were not in the original Calman recommendations, but we certainly welcome the inclusion of that tool for the Scottish Government. The Scottish Parliament’s Scotland Bill Committee, in its report, and the Select Committee on Scottish Affairs both recommended that the powers be brought forward from the proposed date of April 2013, and as the Minister will be aware, we have already called for their advancement to 2012. That proposal is in amendment 2.

The Government announced in last week’s written ministerial statement that they are to bring forward to 2011 pre-payments, in order to allow work on the Forth replacement crossing. That is not the same as bringing forward the capital borrowing powers in the Bill, and it would be helpful if the Minister in his winding-up speech were able to confirm that the full capital borrowing powers will be available from the next financial year, if the Bill is on the statute book by that point.

I also welcome the announcement in the statement that the Government are removing the requirement for Scottish Ministers to absorb the first £120 million of tax forecasting variation within their budget, giving them greater flexibility. A number of comments have been made about extending the borrowing limits, and that should be a matter of negotiation between the two Administrations. The Secretary of State says that he views the figure of £2.2 billion as a floor rather than as a maximum, and that is welcome.

My right hon. Friend the Member for Birkenhead (Mr Field)—

[Kate Hoey]

He’s gone to the loo.

[Ann McKechin]

My right hon. Friend and my hon. Friend the Member for Vauxhall (Kate Hoey), who I understand has reached a memorable birthday, spoke to new clauses on the Barnett formula, and the hon. Member for Milton Keynes South and others pertinently said that there is no easy solution. [Interruption.] I am pleased to see that my right hon. Friend has returned to his seat. In the financial year 2009-10, however, the average per capita expenditure in Scotland was £9,940, while in London the figure was £10,182. Indeed, it has been stated that the move to a needs-based system in countries such as Australia has resulted in the same amount of debate about what is required.

Barnett should not be confused with devolution. Devolution allows the Scottish Government to make their own decisions on a range of issues, such as prescription charges, which do not apply in England, but it is separate from Barnett formula issues. The Barnett formula is relatively simple and objective, and as the Calman commission stated, any changes to it would be difficult to determine and “a highly political process”.



On the new clauses on corporation tax, for the record the hon. Member for Dundee East (Stewart Hosie) spoke about fiscal autonomy for 42 minutes, not 14. However, we are not necessarily any clearer about what impact his proposals would have on the electorate in Scotland. The Calman report specifically rejected the devolution of corporation tax. Paragraph 3.113 of the final report says that

“we therefore reject the devolution of corporation tax. Nor, especially in view of its volatility…from one year to another, do we see it as a candidate for tax assignment.”

Eurozone Financial Assistance

Baroness Hoey Excerpts

Tuesday 24th May 2011 Commons Chamber

[Kate Hoey (Vauxhall) (Lab)]

I want to contribute to the debate because it is often implied in the media and elsewhere that very few Labour Members are against what is happening in Europe. It is important to point out that millions of Labour voters would support the motion, and would like to see my party take an even stronger view on this issue.

I do not know the details of who signed up to what and when, but I am clear that if it was our Chancellor who did so, we should not have signed up to these arrangements. The new Government coming in should certainly have made it clear that they were a new Government and that they would look at the matter again. I appreciate that they are a coalition, but this should have had a high priority in the coalition agreement.

[Graham Stringer]

I am following what my hon. Friend says, and I agree with her. The previous Government were out of tune with the electorate on Europe, as are this Government. Would it not be good to have a national debate on these issues, and a referendum on whether we should be in or out of the European Union?

[Kate Hoey]

Yes. I am a supporter of the People’s Pledge campaign, and any other campaign that I see on a referendum. I would like those campaigns to work together more.

Even in the House today, we are going to end up being unable to have a clear vote on this issue because of the way in which the procedure works and because of the way in which the Government—like previous Governments—are in a nice, cosy little group with all the pro-Europeans to ensure that we never have a real vote on these matters. I am not sure whether all those Members who have signed up to the Government’s amendment knew what they were signing up to. I cannot believe that they do not support the motion tabled by the hon. Member for Rochester and Strood (Mark Reckless). Looking at the amendment, we see that they accept the motion up to and including the point that the EFSM is “legally unsound”. If something is legally unsound, the Government should automatically oppose it. I am sure that the European Union will be quivering when it hears that the Government’s amendment proposes that the Government

“raise the issue of the EFSM at the next meeting of the Council of Ministers or the European Council; and supports any measures which would lead to an agreement for a Eurozone-only arrangement.”

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

rose—

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

rose—

[Kate Hoey]

I will not give way again.

Does anyone in the House really think that our Government would be listened to if they went along to the Council of Ministers and said that they were very concerned about this issue? They have not even managed to get Parliament to give a clear signal about what it thinks. They have fudged the vote today so that it will be pretty meaningless. This fudging on Europe goes on all the time among the cosy establishment, and it makes people angry and frustrated, not only in the House but out in the country.

I recently asked the Foreign Secretary

“if he will have discussions at EU level on reducing the funding spent by the EU on publicity campaigns.”

This matter arose because the European Union has decided to put by even more of our money to ensure that ordinary people throughout the EU are told how wonderful the EU is. We are spending money directly on European Union propaganda. The answer came back from the Minister for Europe, and the first bit sounds great:

“While it is important for institutions such as the EU to communicate effectively…spend on this should be efficient, affordable and proportional. Funding levels for the EU to communicate its work publicly, as for all other EU activities, will be decided within the negotiations on the EU 2012 Budget. With those negotiations, this Government are seeking substantial reductions in spend and greater efficiency across all areas of the Budget.”—[Official Report, 23 May 2011; Vol. 528, c. 448W.]

Once again, fine words. The previous Government said exactly the same thing, but nothing ever changed. Nothing relating to the European Union ever changes. The sums of money involved never go down. We never pay less; we pay more and more.

With regard to what my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, I believe that it is time for us to have this debate out there in the country. Let us stop being afraid of our constituents’ views, and listen to what many people out there want to say. This Government need to accept what the previous Government would never accept—namely, that we are here to stand up for our constituents and our country on this issue. It is about time that we started to say no to Europe, and to mean it.

--- Later in debate ---

[Chris Heaton-Harris]

Absolutely—and let me make it perfectly clear that, thanks to what Labour did a year ago as it was leaving office, the EU cannot veto the grant of an EU loan or credit line extended via the European financial stability mechanism.

[Kate Hoey]

The hon. Gentleman can say what he likes about why we cannot do this and cannot do that, but does he not accept that the people of this country do not care which party did what? They want us to veto this now, and if we cannot do so, we should simply not pay.

[Chris Heaton-Harris]

I should love to agree with the hon. Lady on that—so I will.

Financial Assistance (Ireland)

Baroness Hoey Excerpts

Monday 22nd November 2010 Commons Chamber

[Kate Hoey (Vauxhall) (Lab)]

What kind of conditions is the Chancellor likely to impose on the bilateral loan to Ireland? Will he take into account the feelings of people in Northern Ireland who, if they live on the border, see corporation tax at 12% just down the street, but at 28% in Northern Ireland, and will be asking why they are paying more to help a country when there is such a disparity in corporation tax?

[Mr Osborne]

As I said earlier, the conditions attached to our loan will be similar to those attached to the overall international assistance package; of course, we are part of the discussions when it comes to shaping that package. I would make two specific points. First, we have set very high store by sorting out the banking problem. In other words, using this financial assistance to sort out the banking problem has been the primary thing that I have been calling for in the private discussions we have had leading up to this point.

Secondly, on the rate of corporation tax, I would make this observation to the hon. Lady, and I hope that she has some sympathy with me. Ireland should be in charge of its own tax rates. How the terms of the financial assistance are met has to be a decision ultimately for the Irish Government and the Irish Parliament. It is the thin end of the wedge if we allow other countries and other international organisations to start determining what corporate tax rates should or should not be. It is in everyone’s interests that Ireland grows, and it would not be particularly in our interests if the Irish undertook measures that might, for example, lead to an immediate flight of international business.

Economic Governance (EU)

Baroness Hoey Excerpts

Wednesday 27th October 2010 Commons Chamber

[Mr Hoban]

I take the view that the measures that my right hon. Friend the Chancellor has announced in relation to strengthening the fiscal framework, and the consolidation that he announced last week, will ensure that we will not be subject to any surveillance whatever.

[Kate Hoey (Vauxhall) (Lab)]

It is all very well for this taskforce to report on the fiscal discipline of eurozone countries, but what about the fiscal discipline of the European Union generally? It has not even got its accounts properly audited. What are we going to do not only to stop the budget going up but to achieve a cut in the amount of money that we have to pay to the European Union? If we want to ask people what they feel about this, let us have a referendum on whether we should be paying more to the European Union.

[Mr Hoban]

The hon. Lady makes some sensible points about this matter, but she needs to speak to some of her own colleagues in the European Parliament, because they voted against the freeze on the budget. And of course it was her right hon. and hon. Friends who gave away some of our rebate as well. That is part of the problem that this Government are trying to sort out.