Remuneration of EU Staff

Bob Stewart Excerpts

Tuesday 21st February 2012 Commons Chamber

[Mr Cash]

Indeed, and that is far too much of an endemic problem throughout the EU. We know about the case of Marta Andreasen, who was one of the chief accounting officers in the EU some time ago and had the temerity to challenge the basis on which its administration in the Court of Auditors was being run. She was sacked. Before that, there was Bernard Connolly. I am given to understand today that in Greece the chief representative for EUROSTAT, who has to operate within its regulations, is under siege and under incredible personal pressure, and may even be taken to court because he has taken unpopular decisions.

The problem lies in the idea of acting as judge and jury and being self-serving when the whole of Europe is in a state of complete crisis. People are, frankly, lining their own pockets at public expense at a time when we know, because we have just had our letters from the Independent Parliamentary Standards Authority, that we are not going to be given an increase, any more than are the civil servants and so forth. The disparity between what is going on in the European Union and what is going on in the domestic administration of this country is so glaringly obvious that we have every reason as a Parliament not only to debate the issue but really to put our foot down.

How are the Government approaching the negotiations on annex 11 of the staff regulations, which deals with annual salary adjustments? It strikes our Committee that the procedure by which the exception clause is invoked is tantamount to a breach of natural justice, as the Commission, in effect, decides whether it should freeze the salaries of its own staff. I would be grateful if the Minister explained how she would like this procedure to be amended.

[Bob Stewart (Beckenham) (Con)]

Would it not be natural justice for European bureaucrats to have exactly the same conditions as our own civil service, with no additional money being paid by this country for them to get an add-on to their salaries?

[Mr Cash]

I certainly agree with that, and I would say the same about the European Parliament and the analogy with this House. The reality is that there is an air of unreality. In the words of T. S. Eliot,

“Humankind cannot bear very much reality.”

It is time that we sorted this out.

[Kelvin Hopkins (Luton North) (Lab)]

I stand together with the Chair of the European Scrutiny Committee, of which I am delighted to be a member, on this issue. When we have these debates, I worry about the constant references to Europe. Europe is a wonderful place; I go there for my vacations and I love everything about it. The European Union is not Europe; it is a political construct invented by someone or other and imposed on the peoples of Europe. We should always refer to the European Union, because that is what we are discussing; it does not even cover all the countries of Europe.

My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) talked about making alliances. Some alliances are little short of conspiracies against countries’ peoples. The Greek Government are made up of PASOK, an allegedly socialist party, and New Democracy, an allegedly conservative party, standing together against their own people. In the elections, at least 43% of the population will vote for the left and probably an equal number will vote for right-wing parties that are not even represented in their Parliament. When Front Benchers start to agree with each other against their own peoples, democracy is in danger. We should sometimes take different views, and when we form alliances, we should do so on the basis of what we believe in, and not for political convenience in order to conspire.

On salaries at the European Union, I believe that senior officials there have been bought for generations. When I worked as a scribe at the TUC some 35 years ago, one of our colleagues, who was left of centre, was suddenly jetted off to Brussels to become a European Union, or Common Market, official. His salary was astronomical, and he had to pay no national taxes. It was obvious that he was plucked out so that he could be bought. The people in Brussels wanted to pick out some key people of the left from the trade union movement, which was sceptical about the Common Market, and get them over there literally to buy their loyalty.

[Bob Stewart]

It is not just about salaries but benefits in kind and allowances—duty-free cars and things like that. These are incredible perks that no one else in Europe gets.

[Kelvin Hopkins]

This may be a light-hearted comment, but it always strikes me that people I have known who have gone to work in the European Union come back with a rather fuller figure than when they went. I may be wrong, but that is the impression I get. They are certainly loyal to their new organisation.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

It is a great joy to follow the hon. Member for North East Somerset (Jacob Rees-Mogg)—although, I must say, I do not think that I can follow his eloquence, knowledge and so on.

I want to put on the record where the Democratic Unionist party stands on this issue. Members on both sides of the House have expressed their opinion on the decision to increase salaries and remuneration for those who work in the European Union. That will be financed by taxpayers from the United Kingdom at a time when we are imposing austerity measures on our own population, when our own public servants are being asked to accept pay freezes and when many people in the private sector are taking pay cuts. At the same time, the countries of the EU are telling the people of Greece, Italy and the Irish Republic that their Governments must cut back to the point that jobs are lost and salaries are cut. So for those who make and impose these decisions to then say, “By the way, we’re exempt,” will strike many people as grossly unfair and grotesque.

[Bob Stewart]

There must be huge anger in all EU states, which are all going through exactly the same problems as we are. I just do not understand why other countries in Europe are not as angry as we are in the Chamber about the suggested increase in salaries.

[Sammy Wilson]

That is quite right. Any objective observer is bound to be angry about the fact that there seems to be one set of rules for those cosseted within the structures of the EU, and another for the millions ruled by them and on whom it imposes its wishes. Social disorder is now appearing on the streets of Greece, Italy and other European countries. One can understand why people are angry at the imposition of rules by people who seem totally out of touch and by institutions that, as the hon. Member for North East Somerset clearly explained, are so incestuous in their decision making—they collaborate with each other, supporting one layer of the institution with another layer—so we are bound to get the kind of reaction we have seen.

--- Later in debate ---

[Mr David Ruffley (Bury St Edmunds) (Con)]

We should be grateful to the European Scrutiny Committee for throwing a spotlight on yet another example of an unconscionable lack of accountability on the part of Eurocrats at the expense of democratically elected Governments. Ostensibly, the determination of pay and pension contributions for EU civil servants is the preserve of the Council, in co-decision with the European Parliament and on the basis of qualified majority voting. That is what it says, but of course, as we have heard today in eloquent speeches from those on the Government Front Bench and, in particular, my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), the Commission has frustrated the will of the democratically elected and accountable politicians.

As my hon. Friend said very eloquently, at the beginning of 2011 the Council decided to invoke the exemption clause allowing for a departure from the automatic uprating of remuneration in the event of a serious or sudden deterioration in the economic or social conditions in the EU. It is fairly clear that the Commission ignored that decision but was required to publish a review after being asked to reconsider. The Commission came to the conclusion, however, that there should still be a 1.7% increase in remuneration and a cut—I repeat, a cut—in the contributions of civil servants to their pension pot. This is at a time, I hasten to add, when, in this country, owing to longevity and the rising cost of pensions, we are asking for higher contributions from public servants.

[Bob Stewart]

To my hon. Friend’s knowledge, has the European Union ever been asked to cut its own civil service—or has it done so itself—by such-and-such a percent, as we have had to do in this country?

[Mr Ruffley]

I am terribly pleased that my hon. Friend asks that question. The House of Commons Library told me, about two hours ago, that spending on remuneration and pension contributions for EU civil servants from 2005 to last year went up by a staggering 63% in cash terms. So “No cuts” is the answer to his pertinent question.

When the Commission argued in the summer of 2011 that there were no triggers under the exemption clause—it argues that there was no serious or sudden deterioration in the economic or social conditions in Europe—it came up with a couple of what I can only call classics. They are comedy gold, and with your permission, Mr Deputy Speaker, I would like to quote from the Commission’s report. It says:

“The forecasts released by DG ECFIN on 10 November 2011 show worsening trends for 2011 as compared to the Forecast released in spring both as regards economic and social indicators and that the European economy is currently experiencing a turmoil. However”—

wait for this one—

“despite short-term indicators pointing to an ongoing slowing of economic activity in the EU, the overall growth performance for this year is still relatively strong.”

You couldn’t make this nonsense up. They are meant to be economic experts in the Commission, but they can still print, publish and stand by judgments such as that, when all the evidence to any sentient human being is to the effect that the downside risks to the EU economy are very considerable indeed.

The second comedy classic in that document is where the Commission is rebutting the call from the Council to trigger the exception clause:

“General government deficit within the EU is projected to decrease further from close to 7% in both 2009 and 2010 to 4.7% in 2011 according to the Autumn and Spring Forecasts. Fiscal consolidation is forecasted to progress with public deficits set to decline”—

the Commission was talking about the annual deficit, by the way—and, wait for this:

“even though EU public debt remains a constant concern for the EU economy at least since 2007.”

Well, you can say that again. We have seen colossal debt-to-GDP ratios right across the continent, including in this country. Added to that heady brew of incompetent economic forecasting and putting a rosy glow on a fairly dangerous economic position, the Commission prayed in aid the precedent set by the European Court of Justice, as we heard earlier, referring to the fact that the Court had ruled that the EU was not facing an extraordinary situation. So our old friend the European Court of Justice intervened, in support of the Commission.

We have already heard that the circumstances in this country and other mature industrialised economies in the EU are dire, so we should congratulate ourselves on the noticeable public constraint that this Government have imposed, introducing a two-year pay freeze, followed by two years of average rises of 1%. However, we in this country are paying very large amounts of money, as part of the net EU contribution; and as we know, that figure will go up from this year to the last year of this Parliament. This will outrage members of the British public—hard-working taxpayers who are seeing their private pensions hit, perhaps with the final salary schemes or corporate plans that they are part of closing down, as they face redundancy or lose their jobs.

It is worth reminding ourselves what contribution the British taxpayer is making to the pensions that are the subject of this evening’s motion. The cost to the British taxpayer of gold-plated pensions for retired European bureaucrats is expected to double in the next 30 years unless action is taken—by the way, those are the European Commission’s own projections. If we go further out—say, 50 years—the total contribution from Britain to EU civil servants’ pensions will be a staggering £8.5 billion, which is again a EUROSTAT figure. Many EU civil servants qualify for pensions worth up to three quarters of their final pay packet on retirement. The average annual pension for a retired EU civil servant is just under £60,000 a year. The number of retired civil servants entitled to EU-sponsored pensions is expected to increase from 17,500 this year to 37,500 in 2040. These are large amounts of money which, unless we act, will go towards financing a large pension burden.

I would like to close by reminding the House of what exactly we are getting for our money. Let us remember how utterly useless those civil servants are who do work in the new EU global diplomatic corps, the European External Action Service, and how nugatory their beneficial impact on the lives of British people is. The service will have an annual budget of £5.8 billion and an army of ambassadors across 137 embassies, with up to 7,000 European civil servants who will benefit from the arrangements that we are debating this evening. The EU will have a surprising 46 full-time diplomats in the Caribbean holiday destination of Barbados. The diplomatic corps, which was set up recently, will have 29 diplomats in Tajikistan, 53 in Madagascar, no fewer than 59 in Burkina Faso, 21 in Costa Rica, 46 in Mauritania, 39 in the Indian ocean holiday destination of Mauritius, 26 in Namibia and 27 in Papua New Guinea.

[Bob Stewart]

Papua New Guinea?

[Mr Ruffley]

It gets even better: the tiny Pacific island nation of Vanuatu, which has a population of around 200,000, will have six European civil servants to look after British interests, and there will be thousands more at EEAS headquarters in Brussels, and in Paris, Vienna, Rome and—let us not forget our old friend—Strasbourg.