European Council

Baroness Royall of Blaisdon Excerpts

Monday 26th November 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I am grateful to the noble Lord the Leader of the House for repeating the Statement give to the other place by the Prime Minister. Clearly this is not the first EU budget negotiation to go into a second round and it will not be the last. However, the most important question is the deal that is eventually delivered. I would like to ask the noble Lord three main questions about the budget level, what the budget is spent on and the Government’s negotiating position.

On the budget level, we on these Benches were surprised by one omission in the Statement? Somehow the Prime Minister seemed to forget to thank the Members of the other place for sending him into the talks with the strongest negotiating mandate. The Government now say that there is a widespread support in Europe for a tough settlement. Can the Leader of the House say what proposals there are for meeting the call in the other place for a real-terms cut? Does the noble Lord the Leader of the House agree that the truth is that the Government should have been starting to build the alliances for a real-terms cut in spending a long time ago? The Government should have spent the last two and a half years building alliances rather than alienating our partners.

In relation to the deal that still needs to be done, can the Leader of the House confirm in precise terms what the Government mean by a real-terms freeze? We have the Government’s definition, set out by the then Economic Secretary in her memo of 16 July 2011, that is to say a European budget of €885 billion in actual payments over the seven-year commitment period. Will the Leader of the House confirm that that remains the Government’s position?

Then we have the composition of the budget, which is as important as the budget level itself. We need to reshape the budget so that it supports jobs and growth with investment in infrastructure, energy, and research and development, which would be of real benefit to the people of this country and of Europe as a whole.

The Prime Minister has in the past called for major reform of the Common Agricultural Policy and as he arrived in Brussels for this Council meeting, he said that this is not “a time for tinkering”. Indeed. The Prime Minister said at his press conference on Friday:

“Already being contemplated is a big cut in agricultural spending … Our point has been you don’t have to go beyond that”.

Will the Leader of the House explain what the “big cut” is that the Government are talking about? Will he confirm that the proposal on the table sees agricultural spending remaining on average at 38.3% of the European budget over a seven-year period—almost exactly the same level as it is now? Do the Government really believe that this is the major reform required? Does the Leader of the House agree that, what is even worse, in order to keep agricultural subsidies high, money is being taken from much needed investment in energy and other infrastructure? Will he say whether the Prime Minister objected to this part of the proposal?

As we anticipate the further negotiations in the months ahead, the wider stance of the Government towards the EU will clearly have an impact. The Prime Minister says that he is in favour of us remaining a member of the EU, which I of course welcome, but, last month, the Education Secretary briefed that he was open to leaving the EU. The Work and Pensions Secretary is said to be of the same view, while only on Saturday the chairman of the Conservative Party said that we should threaten to leave. Today, we have the new vice-chair of the Conservative Party touring the studios not about a budget deal but about doing a deal with UKIP. Do the Government believe that these divisions help or hinder our national interest in delivering a budget deal? Why at this time of continuing negotiations is the Prime Minister allowing members of his Cabinet openly to undermine his own position on membership of the European Union?

It is no wonder that everyone, from British business to our European allies, believes that we are drifting towards exit. As we look ahead to the next round of the budget negotiations, the reality of the position seems to be that the Prime Minister has a divided party on Europe and that, instead of confronting the issue, he is just letting the problem get worse.

A good part of the Statement was spent talking about the deal that the Prime Minister did not do, but it is what the Government deliver for Britain which really matters. I believe that, as long as the Prime Minister allows his party to drag him towards the exit door, the Government will find it harder to build lasting alliances and far harder, therefore, to deliver for the national interest.

[Lord Strathclyde]

My Lords, I am increasingly at a loss to understand the noble Baroness’s party’s position on our great European home, particularly given her background in the European Commission. What did it do when it was in government? The Government in whose Cabinet she sat waved through above-inflation hikes to the previous EU budget; they gave away £7 billion of our rebate; they failed utterly and completely to get CAP reform in return; and they would not even use the veto to protect Britain’s interests. All that goes on top of the promise in 2005, let us not forget, of a referendum on the Lisbon treaty. As soon as they got in, they forgot all about that.

The noble Baroness, speaking on behalf of the Labour Party, said that we do not have an alliance. The only reason that we are having this kind of Statement today is that we have a strong alliance. We have the Dutch, the Swedes, the Danes, the Finns and the Germans all backing our position. I would rather be with them on this issue than with the Labour Party. One might well ask where Labour’s alliance is on all this. It seems to be muddled, with its leader in the European Parliament asking for more money in stark contrast to the leadership demonstrated by—

[Baroness Royall of Blaisdon]

My Lords, I should point out that Labour MEPs in the European Parliament, led very ably, voted together with the Conservative Members of the European Parliament against an increase and in favour of a freeze.

[Lord Strathclyde]

My Lords, it is amazing how quickly policy changes in the Labour Party when it is in opposition, but its leader in Europe called for us to contribute £1 billion more to the EU. Its MEPs voted against freezing last year’s budget at 2010 levels and its group in the Parliament has called for a 5% budget hike and new EU taxes. And then to our rebate—

[Baroness Royall of Blaisdon]

My Lords, that is not true. The leader of the group of European Socialists may well have voted in that way, but the leader of the British Socialists in the European Parliament, Glenis Willmott MEP, voted against, together with all British Labour MEPs.

[Lord Strathclyde]

My Lords, I now wholly understand why I was confused. It just depends what kind of European Parliament socialist you are talking about. The noble Baroness also asked me about the real-terms freeze. We are of course in the middle of what will clearly be protracted and complicated negotiations. It is not possible for me to follow the noble Baroness into the detail of the numbers but we have said that we believe there is scope to reach agreement on a real-terms freeze, which would be a commendable objective to achieve. Furthermore, on the composition of the budget, if you look at the figures on agricultural policy, we were happy to go along with a cut from €336 billion to around €270 billion, which, with an added contribution from the Commission’s administration savings, would have been sufficient. However, for some other European colleagues, that was a cut too far on the CAP and it was not accepted.

I finish by dealing with the conclusions of the noble Baroness. She accused us of trying to do backdoor deals with UKIP. I can confirm that there are no backdoor deals with UKIP or indeed with anybody else. As for the Prime Minister being undermined by members of the Cabinet, I absolutely assure the noble Baroness that he does not feel in the least bit undermined by anything that anybody has said because we have a completely united view that we should operate with British interests and in the best interests of the British taxpayer. That is what happened at the end of last week in the European Council budget negotiations and it is what we will continue doing in the future.