Draft European Union Budget

John Healey Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Hoban]

I am pleased to have this opportunity to discuss the 2013 EU budget.

As Members will know, the economic climate in the EU has changed dramatically in recent years, and the situation remains fragile. The uncertainty in the euro area is the biggest challenge facing the EU economy, and there is a risk that it will affect growth and jobs in Britain. That is why we have pressed the euro area to address both the immediate challenges and the long-term systemic issues that it faces. In the midst of one of the biggest debt crises to hit Europe, this Government and Governments across the EU have made difficult decisions in order to consolidate their public finances and implement structural reforms.

The EU budget, funded by EU taxpayers, cannot be immune from the changes that are sweeping across Europe. An ever-increasing EU budget is not the way in which to fix Europe’s problems, and it is time for the EU to live within its means. That requires a strict reprioritisation and the targeting of areas that support growth and reduce the waste and inefficiency that has become characteristic of EU spending.

[John Healey (Wentworth and Dearne) (Lab)]

The Financial Secretary mentioned supporting growth. As he will know, as part of the preparation for the EU’s next budget period there are proposals for “transition regions” status, which could benefit at least 11 regions in this country. We in south Yorkshire are aware of the benefits that it could bring by supporting local jobs, businesses and growth. Are the Government in favour of the concept of transition regions?

[Mr Hoban]

I am surprised that the right hon. Gentleman has raised that point, given that the amendment tabled by a member of his own Front Bench calls for a more restrained budget and given that one of the consequences of a cut in the budget would be a further constraint on spending. Our main priority is to deliver a freeze in the multi-annual financial framework, and we need to establish which measures in the budget are consistent with that. However, we do need to focus on jobs and growth, and the biggest challenges in that regard are often presented by the newer accession states when the gap between their economies and those of countries such as the UK, France and Germany is at its widest. We need to focus on spending in the areas where there is the greatest potential for those countries to yield real fruits in terms of economic growth and jobs.

[John Healey]

I am not entirely sure whether that was a yes, a no, a maybe, or an “I don’t like to say.” The Financial Secretary will know that the qualification for transition regions status is a GDP that is between 75% and 90% of the EU average. Some parts of our country require that extra help; they need more balanced growth, and support for jobs and businesses. Does the Financial Secretary support the concept—I am not asking about the quantum—of transition regions in the next EU budget period?

[Mr Hoban]

The negotiations on regional funding are a matter for my colleagues in the Department for Business, Innovation and Skills, and I am sure that they will respond to the points that the right hon. Gentleman has made. Our overarching priority is to ensure that our spending in the EU gives us value for money, and the overall settlement for the next seven years and the multi-annual financial framework must reflect that. He may wish to participate in the debate on the preparations for the framework which will take place in European Standing Committee B when the House returns in September. That is one of the many opportunities for debate provided by my hon. Friend the Member for Stone (Mr Cash) in his role as Chairman of the European Scrutiny Committee.

--- Later in debate ---

[Mr Hoban]

My hon. Friend makes a powerful point. We need to view expenditure issues in the context of the impact of our contribution and how it is linked with the rebate, but I do not want this to turn into a debate entirely about structural funds. There will be many other opportunities to discuss those.

[John Healey]

rose—