European Union (Finance) Bill

Kevin Foster Excerpts

Tuesday 23rd June 2015 Commons Chamber

[Mr Gauke]

I give the assurance that the Government will always defend our rebate. Perhaps it might be helpful to the Committee if I make the point that I made on Second Reading about the scale and significance of the partial surrender of our rebate by the Labour Government. According to the European Commission, the disapplication of the UK rebate cost the UK about €9 billion over the seven-year period of the previous multi-annual financial framework. Thereafter, with the abatement disapplication fully phased in, the cost to the UK is about £2 billion a year. That is a significant sum, particularly given the fiscal circumstances that we continue to face.

Frankly, the question of what was achieved in return for the surrender of that partial rebate might be asked. Perhaps we will hear an answer to that later this afternoon, but I have not heard a convincing answer yet.

[Kevin Foster (Torbay) (Con)]

The Minister has outlined how the European Union is currently funded through contributions from member states. Some in the European Parliament argue that that system should be replaced by direct taxes levied by the European Union. Will the Minister confirm that the British Government would resist any such move?

[Mr Gauke]

Yes, we would resist such a move. It would be a fundamental change to the nature of our relationship with the European Union, and one that would go in entirely the wrong direction for the United Kingdom. There were calls in the negotiations for such a step to be taken. There were calls, for example, for a financial transaction tax to be introduced to finance EU spending. We resisted that. The Prime Minister was very clear in ruling it out from any deal.

--- Later in debate ---

[Mr Gauke]

Walked into it? I ran with enthusiasm into the answer, and I am glad that I anticipated the hon. Gentleman’s point.

[Kevin Foster]

I thank the Minister for generously giving way to me a second time. Does he agree that the European Commission did not propose a single euro of savings when the negotiations started, so it would be strange to ask it to conduct the review to secure better value for money, as the new clause demands? In essence we would be asking the poacher to review how the poaching is getting on.

[Mr Gauke]

I take my hon. Friend’s point. We are, I hope, moving in the right direction. The new Commission has been in place for the past few months or so, and the early signs are—I shall return to the point—that it appears to be more focused on the task. I think there is a link: there was a reduction in the EU budget, which has somewhat focused the mind.

--- Later in debate ---

Substantial insult has been added to injury in these matters. The European Union, after representations from the Scottish Government and others, tried, in a minimalist fashion, to address these imbalances, which had occurred due to the total incompetence of the UK Government’s negotiations and their stance on the CAP. It decided to allocate €220 million as convergence money to take account of the fact that there was such an imbalance in support per hectare in the United Kingdom—in Scotland, in particular—compared with the rest of the Europe. All of that €220 million is to be distributed geographically across the UK instead of accepting that the UK is getting it because of the dramatic imbalance in terms of the huge land holdings in Scotland and the very, very low payments per hectare. I have heard that described in National Farmers Union meetings in Scotland as akin to embezzlement by the United Kingdom Government. That is how it is regarded. I hope that the Minister will at least revisit the issue of the convergence money, or if not, another issue that should be revisited—getting a fairer distribution of agricultural support. An industry in a competitive position in a common market with other industries must have a fair distribution of support in order to compete effectively.

[Kevin Foster]

I have been listening with interest to the right hon. Gentleman’s points about funding for Scotland. How does he think this support would be getting on without the benefit of the UK’s rebate?

[Alex Salmond]

One of the reasons we do so incredibly badly in many European programmes as regards funding is that the Treasury’s interest, when looking at additionality, as it calls it, is always to minimise EU expenditure. Although it is perfectly acceptable for the Government to defend the rebate, it is less acceptable to look at every European programme and try to minimise expenditure on it, because in doing so, we lose some of the alternative opportunities that the hon. Member for Worsley and Eccles South talked about. If the Treasury looks at every European programme and says, “How do we minimise spending?”, what follows as a natural consequence is that our share of that spending is also diminished. In the case of the common agricultural policy, it is possible to make a direct connection with the negotiating stance of the right hon. Member for North Shropshire, who was trying to abolish farm payments altogether and got the miserable, unfair and inequitable distribution of support that has been the end result of the CAP negotiations.

The Minister—I am not sure if it was a dead bat, a glorious drive through covers, or a catch at slips—rather evaded the direct question of what is the Prime Minister’s negotiating stance on the budget. The Minister said, after being passed a note, that the Prime Minister’s stance was to cut the whole budget and to protect the UK rebate. Let me point out that that has been the Government’s stance and policy since they took office in 2010; it is not a particular stance for these renegotiations. What the Minister is being asked—we really would like an answer—is whether the Prime Minister has a specific target in mind in renegotiations for changes in the EU budget or the UK contribution to it, and if so, what it is. Failure to answer that question throughout the debate adds to the no doubt unworthy, but considerable, suspicion shared across this Chamber that the Prime Minister is adopting this nebulous approach to what are his negotiating aims so that whatever he comes back with can be announced as a fundamental achievement. That does not stand scrutiny in this Committee, but even more importantly, it is a particularly poor campaigning argument in favour of the European cause.

I hope that the Minister—the last man in—will rise to the occasion by confirming that he is in favour of more equitable distribution of land ownership in Scotland and by giving us an insight into the Prime Minister’s true negotiating hand in the coming arguments and discussions in the European Union.