Draft European Union Budget

Andrew Percy Excerpts

Thursday 12th July 2012 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

This subject has been omnipresent throughout my political career. For 10 years, I served on the European Parliament’s Budgets Committee and Budgetary Control Committee.

[Andrew Percy (Brigg and Goole) (Con)]

You get less for murder.

[Chris Heaton-Harris]

Yes, indeed.

I am very keen that the Government get their principles in line and their priorities straight. I want to explain why the amendment tabled by the Opposition is complete rubbish and to give the Minister a feel for why many Conservative Members think that we need to be doing slightly more, in a slightly stronger way, to achieve the aims that I think we all agree on, given that the European budget is way too high.

This year is important in budgetary terms because 2013 is the last year of the current multi-annual financial framework. The work that is done now on the 2013 budget will hold firm for next multi-annual financial framework, within which the Commission is bidding for a lot more money. That is significant for the United Kingdom.

The Commission raises this money in a number of ways: direct payments from national Governments based on each country’s gross national income, a levy on each national Government that takes a slice of their VAT income, customs duties on various imports from outside the EU, and levies on sugar production. That accounts for about 99% of the budgeted income of the European Commission. To put that into scale, in 2010 the UK’s gross contribution to the EU budget was €14.66 billion and we received back €6.75 billion, equating to a net contribution of €7.91 billion.

[Chris Heaton-Harris]

That is a correct assumption. A number of those projects would not have been financed by this Government or by previous Governments, so the money is being diverted into different things. That is why the last Prime Minister, when he was Chancellor of the Exchequer, mooted the idea of repatriating those moneys.

[Andrew Percy]

I agree that the Labour amendment is total nonsense. Is it not true that a lot of money is being spent on infrastructure projects in parts of the European Union that are wealthier than the area that I represent, where a great deal of Government funding is being cut? That is completely unacceptable to my constituents.

[Chris Heaton-Harris]

I agree with my hon. Friend that it is a difficult ask for us to explain to our constituents why no money is forthcoming for reasonable projects in our areas, when we are giving money to richer areas across the European Union through the regional structural funds. That is an aberration that we should look at seriously.

We were the second largest net contributor to the European Union in 2010. Germany was ahead of us with €11.95 billion. Behind us were France with €6.48 billion and Italy with €5.84 billion. Obviously, Italy is not the richest country in the world at the moment, so it, too, is trying to do something about its net contribution. The largest net recipients in 2010 were Poland with €8.17 billion, Greece with €3.44 billion and Spain with €3.1 billion. So there are lots of fiscal transfers across the 27 member states.

Many other costs are hidden in the European Union budget.