Draft European Union Budget

Jacob Rees-Mogg Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Hoban]

I have to say that I always thought it was appropriate to obey the law, even in circumstances where we would perhaps rather not do so. We need to take our obligations seriously, but that does not in any way weaken our resolve to get the best possible deal for British taxpayers.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am sure that the Minister has as much backbone as Margaret Thatcher had. She went along to European Councils and said, “Give us back our money.” I think that is the line he should take.

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[Chris Leslie]

I am glad that the hon. Gentleman is, as ever, in his place.

If people realised how weak the Government were being in their negotiating stance, they would be totally appalled.

[Jacob Rees-Mogg]

The hon. Gentleman is very reasonable in all these matters and of course he wants answers from the Government, but in that spirit of frankness, does he personally regret the loss of £10 billion to the UK Government by giving away the rebate? I know he was not personally responsible for that.

[Chris Leslie]

The hon. Gentleman has to realise that the European Union was going through a totally different era of accession countries and enlargement. Now, we are in a post-financial crisis era, in which it is absolutely clear that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, serious spending cuts are taking place in our domestic economy and budget. Many of our constituents want pro-job, pro-growth and pro-stimulus measures to be priorities here in the UK, and they feel aggrieved that some administrative budgets in the EU will continue to roll forward without the UK Government showing the restraint that they ought to show while they are at the height of their potential negotiating powers—hence the amendment that we have tabled.

Despite the Financial Secretary to the Treasury’s sudden animation when I asked him what exactly the Government are doing, the motion does not set out clearly the view, which ought to be and would be shared by all hon. Members, that the budget and the multi-annual financial framework should be reduced in real terms. It is a simple statement that would help the Government in their negotiations, and that is why the House should support the amendment.

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[Chris Heaton-Harris]

Yes, indeed.

I am very keen that the Government get their principles in line and their priorities straight. I want to explain why the amendment tabled by the Opposition is complete rubbish and to give the Minister a feel for why many Conservative Members think that we need to be doing slightly more, in a slightly stronger way, to achieve the aims that I think we all agree on, given that the European budget is way too high.

This year is important in budgetary terms because 2013 is the last year of the current multi-annual financial framework. The work that is done now on the 2013 budget will hold firm for next multi-annual financial framework, within which the Commission is bidding for a lot more money. That is significant for the United Kingdom.

The Commission raises this money in a number of ways: direct payments from national Governments based on each country’s gross national income, a levy on each national Government that takes a slice of their VAT income, customs duties on various imports from outside the EU, and levies on sugar production. That accounts for about 99% of the budgeted income of the European Commission. To put that into scale, in 2010 the UK’s gross contribution to the EU budget was €14.66 billion and we received back €6.75 billion, equating to a net contribution of €7.91 billion.

[Jacob Rees-Mogg]

My hon. Friend mentioned the repatriation of funds to the UK. The net figure that he cites assumes that the European Union spends money in the UK in a way that we would like, but that is not a fair assumption.

[Chris Heaton-Harris]

That is a correct assumption. A number of those projects would not have been financed by this Government or by previous Governments, so the money is being diverted into different things. That is why the last Prime Minister, when he was Chancellor of the Exchequer, mooted the idea of repatriating those moneys.

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[Jacob Rees-Mogg (North East Somerset) (Con)]

It is a great pleasure to follow the right hon. Member for Leicester East (Keith Vaz), although I note that we are all glad that he is Chairman of the Home Affairs Committee rather than the Select Committee on the Treasury, because 13 minus six is certainly not three. None the less, it was a great pleasure to listen to what he had to say.

I want first to deal with the hypocrisy of the European Union. It seems to me outrageous that the European Union is saying to the peripheral nations—the nations in trouble—that they must cut, be austere and have reduced budgets forced on them while it builds up its own empire and takes more money for itself, so that it can enjoy the fleshpots of Brussels while the people in Greece can hardly afford to eat. This is deeply shameful and another reason for being suspicious of the European Union and the way it operates.

On the other hand, I support the Government because they have been valiant, in extremely difficult circumstances, in trying to keep the budget under control. As my hon. Friend the Member for Daventry (Chris Heaton-Harris) pointed out, it is almost impossible to get a qualified majority to keep the budget down when so many people benefit from an increased budget. However, the Government have done incredibly well in getting allies and in working with other member states whose interests are aligned to ours to keep the increase down to just a little above inflation. Of course I would like to see more; I would like a cash decrease in the budget and a remarkably small EU budget in general, but, given the difficult circumstances that the Government face, they have done extraordinarily well.

The Government have a bigger challenge ahead of them, however, because this arrangement is just for 2013 and they will have to negotiate the multi-annual financial framework. They hold one crucial card in that respect, which is unanimity—the veto. I would be interested to hear from the Minister whether the starting point for the multi-annual financial framework will be the budget for 2013 as agreed or the limit for the 2013 budget as agreed under the last multi-annual financial framework, because I believe that there is a difference of €11 billion between the two. If we are starting from the much higher level, we might find ourselves being told that the reduction has been a great success when in fact there has been an overall increase. That technical point is important.

I also want to issue a warning to the Government, and here I am going to sound like a Treasury stooge—a position that I hope to achieve at some point—who supports the Treasury line on everything. I support it in this regard, however, because I believe in austerity, and in cutting public spending and getting it under control. I am very worried about the partial general approach that is being taken to the multi-annual financial framework. I am worried that other Ministries are agreeing to programmes that will require funding, and that they will subsequently present the Treasury with a fait accompli.

[Mr Hoban]

I can assure my hon. Friend that that is certainly not going to be the case.

[Jacob Rees-Mogg]

I am reassured by that, but I note that some of the documents that we have seen in the European Scrutiny Committee make it seem as though it would be difficult to un-agree some of the things that have been agreed. I am reassured, however, that the Minister is going to watch the situation carefully.

I should like to finish by thanking the Opposition for their marvellous amendment. It has without doubt achieved one thing, which is to unify the Conservative party in ridiculing an amendment that could hardly be sillier, more foolish, more erroneous, more wrong-headed or more potty—I hope that that word counts as parliamentary. Let us look at it. It states that

“the UK’s ability to negotiate a satisfactory European Union budget deal has been weakened by the Prime Minister’s failure to secure allies”,

yet the Prime Minister has secured allies right, left and centre. He did it for this year’s budget, and he has done it again for next year’s. It was one of his great European negotiating triumphs over the mendicant nations that get more money out of the European Union than they pay into it.

The Opposition also have the brass neck to state in their amendment that they want a real-terms reduction in the multi-annual financial framework, and that the Government will not answer their questions. I asked the hon. Member for Nottingham East (Chris Leslie) a simple question about the £10 billion that we lost, whether he regretted it in any way. I phrased my question as gently as I could, acknowledging that he had not been in Parliament at the time—a sad loss to the nation—but did he answer me? Did he say that it had been a great humiliation and a great shame that the last socialist Government had lost £10 billion of hard-earned British taxpayers’ money? Not a bit of it. He wandered on, and he meandered around, but he said nothing helpful of that kind. He therefore unites the Tory party in chortling at the effrontery of the socialists in coming here, when they spent money as if it was going out of fashion, and expecting us to do a job that even Hercules would probably have found beyond him.

I urge the Government—I beseech them—to cut the spending of the European Union. I am with my hon. Friend the Member for Daventry in saying that we should say to the EU: “For those 17 years of not having your accounts written off, we are deducting £1.7 billion from our contribution.” That has a nice symmetry. Let the EU take us to the Court—the Court that, as we discovered earlier, is gummed up with cases—and let it see whether it could bring a case against us to show that the law was on its side. I doubt that it would be.