Multiannual Financial Framework

Denis MacShane Excerpts

Wednesday 31st October 2012 Commons Chamber

[Greg Clark]

Our position is that we want the EU budget to be cut, but part of the negotiating mandate that the Prime Minister has agreed is that the very most that we would accept would be a real-terms freeze. However, we want a cut, as I shall explain.

The Commission—this time with the European Parliament—has proposed an increase of 6.8% for the 2013 annual budget. That is for a year in which the IMF forecasts that growth throughout Europe will average 0.5%. My view, and that of the Government, is that such a demand constitutes a grotesque imposition.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the Financial Secretary to his new job. Will he confirm the House of Commons Library figures showing that Her Majesty’s Government’s spending between 2010 and 2015 will increase by £100 billion?

[Greg Clark]

I cannot confirm that, but I noted from the right hon. Gentleman’s article in the New Statesman that he is calling for increases in the budget, especially for the structural funds.

The Commission’s proposal is totally unacceptable, so let me say very clearly to hon. Members, as well as those around Europe who might be watching, that it is not happening. On the MFF, we will accept no real-terms increase in the EU budget for the next seven years. We will veto any proposal that either does not cut the budget or does not at the very least freeze it for the whole of the period. There will be no more budgets that pursue ever closer union through ever higher spending.

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[Chris Leslie (Nottingham East) (Lab/Co-op)]

That was a rather partisan speech from the Minister—[Interruption.] Well, it is the truth—it was rather partisan. May I first place on the record my appreciation to the Leader of the House, who is not in his place, and to the new Chief Whip, for scheduling this debate? Without the Government helpfully timetabling the motion on the report from the European Scrutiny Committee, we would not have had the opportunity to express the view of the House of Commons today.

Our economy has struggled in the past two years. We have stood still while our international competitors have accelerated away, and the flatlining economy has been bad for public finances, with borrowing higher so far this year than in the same six-month period last year. It is therefore clear that all demands on the public purse need to be considered with care, and our contribution to the EU budget can be no exception.

[Mr MacShane]

My hon. Friend might be a bit young to recall that in 1984 Britain’s contribution to the then European Community was £654 million. Six years later it had risen fourfold to £2.54 billion. Does he remember which Prime Minister sprayed British taxpayers’ money all over Europe, or are we all now post-Thatcherite, because the Conservative party certainly is?

[Chris Leslie]

The two Government parties have a lot of history to confront, but I do not want to be as partisan as the Financial Secretary, except to say that in a week when 1 million letters are being sent clawing back child benefit, when police budgets are being cut by 20%, when pensioners are having their tax allowances frozen, and when some of the poorest in society are being asked to pay more in tax—[Interruption.] It is a fact. Given all that, would it not be perverse if the European Union were exempt from those cuts?

When times are tough, not only in Britain, but in countries throughout Europe, it is all the more important that the negotiations on the next seven-year EU spending review—the multiannual financial framework—spurn the inflationary tendencies which simply repeat previous settlements plus a nominal price adjustment. Heads of Government need to champion reform, get a grip on the fundamentals of the EU budget and reverse that upward trend. There is a very simple test for the summit on 22 November: will member states just keep rolling forward the EU budget, plus inflation, or can they achieve a real-terms reduction?

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[Mr Denis MacShane (Rotherham) (Lab)]

Does my hon. Friend share my hope that the EU—some time, and perhaps this century—will get the Nobel prize for economics?

[Mike Gapes]

I would hope that my right hon. Friend and I—we are of a similar age—will live long enough to see that, but I do not think it will happen immediately. It will require the eurozone to become much more tightly organised than it is today.

Last week, I visited Germany and Norway with the Select Committee on Foreign Affairs. We are considering the future of Europe and the implications for this country of different options that might arise. Two or three years ago, the political debate in Germany was about trying to keep Britain on board and to move with Britain. However, the reality, right across the political spectrum, is that Germany has given up on the UK under the coalition Government. The Germans see their future as being with France and Poland, and their priority will be to save the eurozone at all costs.

That means that the UK will be in an uncomfortable position. The Prime Minister might have signed a joint letter with European leaders in 2010, but the reality in 2012-13 is that Germany is not with us. Anybody who thinks that only Germany is not with us should read the remarks of Radek Sikorski, the Polish Foreign Minister, who gave a radical speech in Oxford just a few weeks ago, in which he used phrases such as:

“Poland wants to be with Germany and France as partners”.

He also said:

“You could, if only you wished, lead Europe’s defence policy…Britain’s leaders need to decide once again how best to use their influence in Europe…The EU is an English-speaking power. The Single Market was a British idea. A British commissioner runs our diplomatic service…But if you refuse, please don’t expect us to help you wreck or paralyze the EU.”

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[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

The speech by the hon. Member for Preston (Mark Hendrick) sounded more like a speech in favour of an increase in the European budget, albeit disguised as a speech in favour of a cut, because that happens to be what he is being asked to vote for today.

I note that passions are high in this debate, not least among my hon. Friend the Member for Banbury (Sir Tony Baldry) and the hon. Member for Ilford South (Mike Gapes). Let me assure them both—because I think they come from the same European stable—that the last thing those of us who support the amendment want to do is wreck Europe or to wreck our relationship with our European partners.

But something very big is happening in British politics—much bigger than this debate. We are debating the European multiannual financial framework, but there is something rather familiar about the positions being adopted by those on the two Front Benches. One could almost imagine that, if they were to change places, each would be making the other’s speech. Indeed, in the last Parliament, one felt that that was exactly what was happening. There is something deeply disconnected about the debates that we have been having in the House about our future relationship with the European Union, and about the aspirations of the British people and what they want that relationship to be.

I would caution my right hon. and hon. Friends against taunting Labour Members over their volte face on this issue. I have no doubt that they have made a volte face on the question of European spending, but for us to accuse them of doing so will cut absolutely no ice with the voters. I would note, however, that the Labour party’s volte face represents a big shift in the politics of this country and in the politics of our relationship with the European Union. Labour is an opposition party that is hungry for power. Even Labour Members can now sense the tide of opinion that is flowing against the European Union among our voters. They are picking up the vibrations from their constituents and from the voters they need in order to get elected, and they have discovered a new principle in order to reflect that: they now want to cut the European budget.

[Mr MacShane]

rose—

[Mr Jenkin]

I give way to my newly Eurosceptic colleague.

[Mr MacShane]

I am deeply grateful to the hon. Gentleman. Whether this is a volte face or a volte farce I am not quite sure, but he is quite right to say that the tide is flowing; it is flowing to Labour and away from the Conservatives.

[Mr Jenkin]

I believe that the Labour party is picking up the anger of the British people about the idea of spending more money on European policies when we are having to cut back on policies of our own.

There is something rather chilling about the exchanges between those on the Front Benches, which tacitly suggest that a veto is a defeat and that it could lead to a worse budgetary outcome for the United Kingdom than could a negotiated settlement. That seemed to be the burden of the argument put by the hon. Member for Nottingham East (Chris Leslie). I should just like to point out to him what that says about the relationship that we now have with the European institutions. Those institutions are so overpowering and so powerful that even the veto of the Prime Minister of the United Kingdom cannot stop the European train on its way to its destination. The British people feel that something has gone wrong with that relationship. This was not the basis on which we were sold membership of the institution, and it was not the basis on which all the assurances were given by successive Governments that each treaty represented no substantial change and was just a “tidying-up exercise”.

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[Mr Denis MacShane (Rotherham) (Lab)]

To every thing there is a season, and a time to every purpose under the heaven. Without indulging in some of stronger language and rhetoric of different colleagues, I say that this may be an important parliamentary moment, because the British people decided in May 2010 not to give any of us a majority. I think they wanted a different kind of Parliament to emerge, one that was a bit freer, a bit more liberal and a bit less whipped; I am a party animal myself and the Whips are necessary, but perhaps tonight some signal can be sent that we are listening.

There are technical points that can and cannot be made. I would dearly love to see, in South Yorkshire or perhaps in Northern Ireland, every public servant’s salary reduced to €100,000—about £80,000. If that salary level was applied, there would be a revolt in Whitehall, and among Cabinet Ministers and senior Ministers of State, if not perhaps among junior Ministers of State.

We have heard the language of “betrayal” used, and I think that is silly, because the country is going through a serious discussion about what its future relationship with Europe will be. The people have never elected Mr Nigel Farage or the UK Independence party to a seat in this House, although they have elected him to the European Parliament. However, his spirit has been present in much of tonight’s debate.

We are facing a fundamental divide, as there are two approaches to European politics. We heard one earlier today, when the ten-minute rule Bill was introduced. It was supported by a large number of Conservative Members and it called for the end to the free movement of people in Europe. It was a well-argued case, but of course it utterly destroys the purpose of the European Union if we are to have passport checks at every border and not allow people to live where they wish.

We are now finding that there is a big debate about the money we spend. I take all the points that have been made about cuts, but we could have the same argument about the Department for International Development’s spending, and I might argue about whether the £13 billion we spent in Afghanistan is money wisely spent. Underneath it all is this dichotomy over Europe. There is a debate about being in or out—an honest debate that we are beginning to have—and another debate among those of us who believe we should stay in the European Union about what kind of European Union there should be.

The voting of money is, of course, what determines what kind of policy we have. This budget is the wrong budget, drawn up by conservatives and cautious, complacent centre-right bureaucrats and politicians. It is inappropriate and it keeps the European budget in the same old tramlines of protectionist common agricultural spending and ineffective regional spending.

[Mr Jenkin]

rose—

[Mr MacShane]

I will not give way. I am very happy with the Speaker’s reduction of the time limit.

Last week, Labour MEPs voted against that budget and for a different priority that would focus on growth, on jobs and on what is needed. That is what I believe should be done, which is why I am happy to vote for the amendment tonight. I am not sure what will happen thereafter. This country will have to face a big question. Tonight it is right that Parliament asserts its authority. That does not mean the end of the debate; it is just the beginning of the debate about whether we stay in the European Union or not.