EU: Budget

Lord Vinson Excerpts

Monday 16th May 2011 Lords Chamber

Asked by

[Lord Vinson]

To ask Her Majesty’s Government, in the light of their programme of public sector savings, whether they will approve proposals to increase over the next three years the United Kingdom’s current net contribution of £8 billion to the European Union budget.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the UK cannot act unilaterally and is required to make its contributions to the EU budget under obligations imposed by the treaties. However, the Government are very concerned about the UK’s growing net contributions and are working hard to reduce them within the constraints of the 2007-13 financial perspective agreed in December 2005. According to the latest forecast, the UK’s net contributions will rise from £4.7 billion in 2009-10 to £8.9 billion in 2014-15.

[Lord Vinson]

I thank my noble friend for his carefully considered reply which is, I appreciate, configured by the limitations to his powers. However, does it really make sense to continue to pour billions of pounds into the economies of other EU countries, to bring fantastic infrastructure improvements to Greece, Spain, Portugal and Ireland, while here at home our infrastructure is in decay? Could we at least contemplate at some stage diverting those funds into our economy, which at this stage would be a classical contracyclical investment, not only bringing great strength to our economy and improving our infrastructure but creating, allowing for the multiplier effect, at least 250,000 new jobs just when they are needed? Surely we should put the interests of our unemployed first.

[Lord Sassoon]

My Lords, I completely agree with the need to invest in infrastructure in this country, which is why we launched the first ever national infrastructure plan last autumn, at the beginning of our suite of pro-growth policies. Approximately £40 billion to £50 billion will be invested in the UK's infrastructure each year over the next five years. As to the European budget, it is quite right that we should make our contribution; but it is completely wrong that the previous Government gave away a significant part of the UK's rebate. The European Commission's figures show that in this year alone, the amount of rebate given away by the previous Government in 2005 will cost us £1.98 billion. As the result of the action that my right honourable friends the Prime Minister and the Chancellor took in reducing by half the increase this year, we clawed back £350 million at the December decision. That is the scale of the challenge we face.