Remuneration of EU Staff

Debate between Bob Stewart and David Ruffley

Tuesday 21st February 2012 Commons Chamber

[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.