Draft European Union Budget

Debate between Ian Davidson and Chris Leslie

Thursday 12th July 2012 Commons Chamber

[Chris Leslie]

That is why we need to change the approach of Ministers in negotiations. We have to come to a settlement. This year, we are on the cusp of Ministers having a veto power over the seven-year spending review period. This is the moment when we need them to be particularly firm.

[Mr Davidson]

Does my hon. Friend feel so strongly about making sure that the agreement we strike with Europe has the support of the people of Britain that he thinks the budget settlement should be the subject of a referendum? That would be an ideal way to determine the long-term budget—the people themselves voting in a referendum on whether they are prepared to accept it.

[Chris Leslie]

I see the tempting avenue down which my hon. Friend wants to go. I am not sure that it is necessarily good to budget by referendum. It would be simple for the Chancellor, the Prime Minister and the Minister to firm up their position and set out things much more clearly than they have in the motion. I urge hon. Members to look at the airy-fairy fudging language of the motion today—and going forwards, which the Minister does not like to talk about.

The Minister was right to draw on the Financial Times analysis, including in pointing out the reduction of just six administrative staff from the 41,000 EU posts. Some increases for pensions, for schooling allowances for EU officials and even for some of those extra accession activities in relation to Croatia, are still pencilled in by the Commission. I do not think that the administrative budget proposals on the table are justified. Instead, we should be reprioritising the resources paid to the EU budget so that they are sweated more effectively for a pro-growth, pro-jobs position—looking at energy markets, high-speed broadband and the infrastructure and structural fund changes that need to be made. I do not think that the Government have appreciated the strength of feeling on this matter.

Eurozone Financial Assistance

Debate between Ian Davidson and Chris Leslie

Tuesday 24th May 2011 Commons Chamber

[Chris Leslie]

I will not because I have only a few minutes left.

The situation has changed markedly since last May. The circumstances under which the EFSM was then agreed have altered, casting doubt on whether it is being used appropriately, as many hon. Members have said. Because of the various weaknesses shown by the current Administration in Europe, we have ended up increasingly paying more than our fair share in relation to the EFSM facility, especially as time and again the junior EFSM fund in the bail-out package has ended up shouldering up to a third of the bail-out costs, as some hon. Members have pointed out. We have found that the agreement in May regarding the EFSM sum of €60 billion would represent only 12% of the non-IMF contribution, with the remaining €440 billion being borne by the wider eurozone fund. The British liability for that was going to be only 12.5%, but the proportion contributed from the EU-wide EFSM to the Irish bail-out was greater than the eurozone proportion. The Portuguese bail-out was hardly an improvement, with one third coming from the EFSF, one third from the EFSM and another third from the IMF.

The Minister must explain to the House why the EFSM, which makes up only 12% of the non-IMF contribution, is being drawn upon to the same extent as or more than the EFSF. That forms a crucial part of the motion tabled by Back Benchers. The Minister is under an obligation at least to say why we are using the EFSM to such a high degree. That is incredibly important. It has been in the gift of Ministers to answer that question, but so far they have neglected to do so.

The EFSM was supposed to be a temporary mechanism all along. The failure of the Government to push forward with a permanent mechanism, despite opportunities to do so, is an abandonment of UK interests. The temporary emergency EFSM was only ever meant to be a short-lived interim arrangement. We should have been moving on as quickly as possible to a permanent eurozone-only mechanism. Why has the Chancellor failed to press his European colleagues to sort out a permanent eurozone-only fund more urgently?

The Chancellor attended an ECOFIN meeting on 18 May. The Financial Secretary attended ECOFIN on 8 June last year, the Chancellor on 13 July, the Chancellor again on 7 September and the Financial Secretary again on 30 September, yet the press releases from each of those ECOFIN meetings suggest that not once did Ministers raise the issue of pressing forward with that permanent arrangement. Can the Minister explain why not?

[Mr Davidson]

The shadow Minister is rightly attacking the Government for being weak and vacillating. Will he tell us what bold, straightforward and clear position he is urging us to take on the vote?

[Chris Leslie]

I am happy to do that. Unfortunately, the wording of the motion refers to the legality of the EFSM, and I do not think the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), would have acted illegally to sign up to it. I accept that that is a small point, but it is for that reason that we will abstain today.

We will have to revisit the issue time and again. It is hugely important that hon. Members understand the situation. We have not yet seen any occasion on which Ministers have raised the subject of moving to the permanent arrangement as swiftly as they can. They claim that they are responsible for having secured a commitment to move to a permanent arrangement in 2013. The temporary arrangements were always going to expire in 2013 anyway. So much for the famous victories claimed by the Prime Minister, the Minister and other hon. Members.

Too often we have an empty chair at the European table. Only a few weeks ago, on 6 May, Britain was excluded again from a meeting that took place in Luxembourg—the empty-chair approach was very evident when ECB officials met the Finance Ministers of Germany, France, Italy, Spain and Greece. Will the Minister say whether there was an active decision by the Treasury to continue to take an empty-seat policy, or were we simply not invited? We see in the Financial Times that Swedish officials are concerned that the Prime Minister is not pressing harder to prevent key decisions from being made only among eurozone members. Will the Minister say what we are doing to stop being sidelined at that European level?

We know very well that that temporary fund was needed. We recognise that it was part of a concerted pan-European action, standing together against the global forces that threatened the bond market with contagion. That is especially the case now in the eurozone. We have to acknowledge that we have trading partners in Europe and it is in our interest to support their continued economic stability, but Britain has already paid its fair share in the stabilisation process in the case of Ireland and Portugal. The time has come for a stronger voice with real influence in Europe to ensure that British interests are properly served, which must mean a swifter move to a permanent eurozone-only bail-out mechanism.

The fund was always due to expire in 2013. That was not Ministers’ doing; it was the original design. We know that Ministers were involved in the cross-party consensus during the transition from the previous Government to the present one. Ministers cannot wriggle out of their responsibility now in relation to the EFSM. The Government are on extremely shaky ground and even their natural allies are questioning the coalition’s leadership. The issue will no doubt return on another day.

Section 5 of the European Communities (Amendment) Act 1993

Debate between Ian Davidson and Chris Leslie

Wednesday 27th April 2011 Commons Chamber

[Chris Leslie]

I simply note at the outset that we are now engaging in a particular debate. Yes, I am glad that it is taking place on the Floor of the House, but we did not really know that it was going to be on the Floor of the House, in this particular form, with this set of papers and this particular motion, until 24 hours ago. It is curious that the Government, in their relationship with many hon. Members throughout the Chamber, have not made it clear that this is quite an important component of our obligations under European Union treaties. I know that Ministers are keen to abide by their obligations under such treaties, but I just point out that some Members might be less keen.

[Mr Davidson]

Given that this debate is so important, will my hon. Friend clarify whether the programme has already been sent to the European Union or if we will have to wait for the result of this debate before it is posted off second class?

[Chris Leslie]

I presume that the House has to agree the contents of the convergence programme before it can be posted to the European Commission. The hon. Member for Bury North (Mr Nuttall) implied that the Commission could probably glean all the information online, and there is a perfectly reasonable argument that the Commission should follow events in member state countries rather than expect these matters to be handed to it on a platter. I do not think that presenting the information is necessarily genuflecting in front of Brussels, but the obligation to do so is certainly a core component of the treaties. I simply point out that fact.

The point of the motion about which we need to be most wary is the noting “with approval” the Government’s assessment of the economy, particularly given the Chancellor’s and Treasury Ministers’ lamentable failure to understand the need for economic growth. Page 13 of the convergence programme, which was published just 24 hours ago, says that the recovery is in line with previous recoveries. That, of course, is not the case.

In the recessions of the early ’80s and ’90s the economy had clawed back economic strength by this stage in the economic cycle. However, since this Government took office, the trajectory of recovery has stalled. We are already seeing that the information in the document, published just 24 hours ago, is becoming out of date.