European Budgets 2014 to 2020

Debate between Denis MacShane and Mark Hoban

Tuesday 8th November 2011 Commons Chamber

[Mr Hoban]

My right hon. Friend makes an important point. In parallel to the debate about the ceilings for the budgetary framework over the course of the period between 2014 and 2020, debates are also taking place on the individual lines of expenditure within the EU budget, and we are proposing significant reductions in cost to underpin our strategy of curbing overall spending by the EU.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Financial Secretary give way?

[Mr Hoban]

May I make a little progress? I am conscious of the number of hon. Members, perhaps on both sides of the House, who want to take part in the debate.

In addition to the on-budget spending increases proposed by the Commission, the Commission has earmarked an extra £18 billion in off-budget spending. That is an alarming lack of transparency that brings added risks of poor oversight and control. In a further lack of transparency, the proposal fails to focus on levels of cash payments—actual expenditure that the multi-annual financial framework will allow in each heading. Instead, it opts to use commitments—planned expenditure—but frankly the cost to UK taxpayers is not how much is planned to be spent but the actual cash going out of the door. This should be the starting point for the higher control over spending, and we and our allies have made that clear to the Commission.

[Mr MacShane]

Will the Financial Secretary give way?

[Mr Hoban]

Let me make a bit more progress and I will take the right hon. Gentleman’s intervention in a short while.

The Commission also asked us to use as our starting point for a freeze—this is perhaps where the hon. Member for Swansea West (Geraint Davies) has been confused by the Commission’s numbers—the level of spend planned in 2005, but we cannot ignore the fact that the global crisis has taken place since then. Every country has had to scale back its spending from pre-crisis days and the European Commission is no different.

The Commission can also do more to ensure that money is spent more wisely. We are leading the way on reforming financial management in the EU. For the first time in 17 years, we have refused to support the sign-off of the EU accounts. We are pushing for simpler, clearer rules on spending programmes that make it easier to spot fraud and error, and we have also raised our game at home to ensure that EU money spent here is spent properly and wisely.

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[Mr Hoban]

We could spend all one hour and 30 minutes detailing the ways in which the EU wastes money. My hon. Friend has raised one. The EU spends more on buildings in Luxembourg than on vital expenditure. So, conscious of your strictures, Mr Speaker, let me make some progress.

Curbing European spending is not the only priority for the UK. We need to tackle how the EU funds its spending, too. The Commission is trying to increase its control over funding by introducing new EU-wide taxes and amending the correction mechanisms such as the UK abatement or rebate. Now, this Government have been absolutely clear. We will defend our rebate. Last time the UK negotiated the multi-annual financial framework in 2005 the then Labour Government gave ground on the rebate in return for reform of the common agricultural policy. What has happened since then? The value of the rebate has fallen, but the spending on the CAP has not budged. We will not fall for empty promises; we will resist any change to the abatement. Our rebate remains absolutely justified. The structure of EU spending means that we get less per capita than any other member state. Without the rebate, the UK’s net contribution as a percentage of national income would be the largest across Europe and twice as large as the contributions made by France and Italy. Our rebate is fully justified, and we are not going to give it away.

[Mr MacShane]

Can the Minister confirm that, for the six years, the proposed increase is 11%. Eleven divided by six is 1.85% or about 1.9% each year. Is that factually accurate?

[Mr Hoban]

This goes back to some of the challenges in the Commission’s presentation of its numbers. The budget proposed by the Commission is £100 billion larger than the real freeze in spending that the UK and its allies have proposed. [Interruption.] The right hon. Member for Rotherham (Mr MacShane) says that I have not answered the question. It is clear that the way in which the European Commission has structured its budget, by having some things on or off-budget and by talking about commitments rather than actual spending, confuses and clouds the position, leaving some to think that the Commission has embarked on a freeze on the budget, whereas in reality the EU is proposing a real-terms increase in the budget.

Let me move on to the second issue in relation to the funding of the EU budget. The Government strongly oppose the proposal for new taxes to fund the European Union budget. They attach considerable importance to the principle of tax sovereignty. Tax is a matter for member states to decide at a national level. We oppose any new taxes or changes to the existing system that increase the UK’s contributions or pose a threat to our long-term position, including a financial transactions tax to fund the EU budget. We cannot accept a budget which asks for more and asks for a greater share from taxpayers and from the UK.

A year ago, the Government set out their plans for the consolidation of public expenditure at the spending review. Supported by the International Monetary Fund and OECD, the Government set out plans to reduce the deficit. We have shown our resolve by keeping the UK out of the storm that has engulfed the euro area, and we will show the same resolve with the European Commission. The inflation-busting increases proposed by the Commission are out of touch with the realities felt by taxpayers across Europe, and out of touch with the views of José Manuel Barroso, who in June argued that many states

“need to show more ambition when it comes to fiscal consolidation”.

We as a Government believe that the Commission needs to show much more ambition, too, when it comes to fiscal consolidation. We will continue to press the European Commission and member states to deliver a multi-annual framework that delivers real fiscal consolidation. This will be a challenging negotiation.

Eurozone (Contingency Plans)

Debate between Denis MacShane and Mark Hoban

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

My right hon. Friend the Chancellor has made it very clear in his discussions with the Finance Ministers of EU member states that we do not want the EFSM to be used in this bail-out—a statement that Madame Lagarde confirmed on British television only a few weeks ago. I welcome my hon. Friend’s congratulations.

[Mr Denis MacShane (Rotherham) (Lab)]

The Minister is prudent not to join in the glee of the euro’s gravediggers, because if Greece defaults, it will not stop on the Acropolis—Portugal and Ireland will be next—and the nine out of 10 banks in the City that are European and foreign-owned will pay a terrible price. Rather than waiting for the eurozone to disintegrate into a set of competing currencies hiding behind capital-controlled walls—the notion that an open-trade Europe can exist in those conditions is nonsense—we should be very careful about where we are going. Boris Johnson said today that Greece was bankrupt. That is a signal to every Greek to get on his bike and seek work elsewhere. Is that really what we want—a new flood of economic migrants into Britain?

[Mr Hoban]

The right hon. Gentleman raises a series of points in his speech, but he makes a strong argument for why it is important that the eurozone is strong and stable. That has broad economic and social benefits. Clearly, if that is to happen, it is important for the Greek bail-out to work and be effective.

European Summit

Debate between Denis MacShane and Mark Hoban

Thursday 24th March 2011 Commons Chamber

[Mr Denis MacShane (Rotherham) (Lab)]

Obrigado, Mr Speaker.

The plain fact is that Portugal is our oldest ally. It is in trouble and we should help. When Margaret Thatcher brought the rebate back, she was questioned by a Eurosceptic on the Labour Benches who asked, “Why are you allowing more money to go from the British taxpayer to all these new countries?” She replied: “We should help Portugal”. We should do the same tonight. I hope that our Prime Minister will remember our longest, oldest friendship with any European country, and ignore the Eurosceptic waffle from those sitting behind the Front Bench.

[Mr Hoban]

I do not believe it is appropriate at this stage to engage in speculation about the Portuguese economy. There has been no request for a bail-out, and further comment would be unhelpful.

Finance Ministers’ Meeting (Ireland)

Debate between Denis MacShane and Mark Hoban

Wednesday 17th November 2010 Commons Chamber

[Mr Hoban]

We are in difficult times and it is best to focus on what can be done to help the Irish economy rather than engage in a debate about statistics on Ireland’s current economic performance.

[Mr Denis MacShane (Rotherham) (Lab)]

May I welcome the statement of the Financial Secretary and the Chancellor, and their offer of £6 billion of UK taxpayers’ money to help stabilise the eurozone? We must all welcome the contribution to consolidating the eurozone as a sound economic area. However, what has happened to moral hazard? Most of the money will go to the banks. When will they pay anything—any price—for the crisis they caused?

[Mr Hoban]

I want just to reiterate—to correct the right hon. Gentleman—that no formal request has been received from the Irish for assistance.

Economic Governance (EU)

Debate between Denis MacShane and Mark Hoban

Wednesday 27th October 2010 Commons Chamber

[Mr Hoban]

My hon. Friend makes an important point. There are many sound arguments against the euro, and that is why we have ruled out joining it. However, it does us no favours to see a weak and unstable eurozone. It is important for eurozone countries to have strong fiscal discipline to ensure stability. The taskforce introduces a mechanism for eurozone countries to try to deliver that.

[Mr Denis MacShane (Rotherham) (Lab)]

Have you noticed, Mr Speaker, that all the Liberal Democrats have mysteriously disappeared from the Treasury Bench as this subject has been debated? I would welcome the views of the right hon. Gentlemen on the Treasury Bench on housing benefit, but may I say to the Minister that I welcome, I think, his clear statement to the House that he is not prepared to go and dwell on planet Cash? He has made it absolutely clear that the Government are not going to veto the treaty, and I welcome that sensible Euro-pragmatism from the new Government.

[Mr Hoban]

I am not entirely sure which planet the right hon. Gentleman is on at the moment. We need to ensure that the eurozone functions effectively, but we have secured an opt-out from the sanctions proposals, originally through the opt-out in the Maastricht treaty and reinforced by the Lisbon treaty. That is the right place for this country to be in, and that is why the coalition Government are right behind that position.

Equitable Life

Debate between Denis MacShane and Mark Hoban

Thursday 22nd July 2010 Commons Chamber

[Mr Hoban]

My hon. Friend makes two important points. She referred to the cap of 20 to 25%, which is Sir John’s assessment and proposal. I am conscious that others, including EMAG, have different views about what the proportion should be, but they accept the principle that some policyholders would have stayed with Equitable Life. Her second point, about the estates of deceased policyholders, is very important. I have given the commission wide terms of reference, with two exceptions. First, it must take into account the estates of deceased policyholders—that is fair. Secondly, there should be no means-testing.

[Mr Denis MacShane (Rotherham) (Lab)]

The Financial Secretary’s fair and measured statement might be taken more seriously had he not, in opposition, belaboured the Labour Government and made wild promises about paying full compensation to Equitable Life policyholders. Does he understand that people thought—

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[Mr MacShane]

Mr Speaker, I have just had extensive root canal treatment and cannot tighten anything around my neck—I am terribly sorry—but I can open my mouth. Does the Financial Secretary understand that Equitable Life policyholders will feel betrayed? When will the Government stop doing endless U-turns?

[Mr Hoban]

Whether or not the right hon. Gentleman wears a tie, it does not add to the sense that he makes when asking questions. We made it clear in opposition that we accepted the ombudsman’s findings the day she published her report, unlike the Labour Government, who took six months to do that. We accepted the recommendations that compensation should be for relative loss and that account should be taken of the impact on the public purse. We have been consistent in that approach. I do not believe that the Conservative party has U-turned in any way. We have stuck to our commitment and made more progress on the matter in the past two months than the Labour party made in two years.