Connecting Europe Facility

Andrea Leadsom Excerpts

Thursday 19th January 2012 Commons Chamber

[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.