EU: Member States’ Budgets

Lord Willoughby de Broke Excerpts

Tuesday 29th November 2011 Lords Chamber

Asked by

[Lord Willoughby de Broke]

To ask Her Majesty’s Government what is their assessment of the proposal by the European Commissioner for Economic and Financial Affairs that the European Commission should have the power to scrutinise member states’ budgets and impose such financial penalties as the Commission deems fit.

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

My Lords, the Government strongly support the recently agreed economic governance legislation to strengthen the stability and growth pact. This provides for stronger and more responsible economic governance across the European Union. Under the new legislation, a range of financial sanctions can be imposed by the Council within the euro area where member states are deemed not to have taken adequate action. Sanctions are set out under Article 136, which applies to the euro area only.

[Lord Willoughby de Broke]

My Lords, I am grateful to the Minister for that reply. However, the statement by Commissioner Olli Rehn applies not just to the eurozone but to the whole of the EU, including this country. Therefore, will the Minister confirm that today’s Autumn Statement by the Chancellor is nothing more than an aspiration—a wish list? Will he confirm to the House that this will have to be ticked off and agreed by the European Commission before it can take any effect?

[Lord Sassoon]

My Lords, this country has always been party to the stability and growth pact, but as I am sure the noble Lord knows, under Protocol 15 the UK has an opt-out, which means that we have to endeavour to avoid excessive deficits but are not subject to any sanctions such as members of the euro area are. Furthermore, the UK secured particular treatment that ensures—has ensured and will ensure—that Parliament will always be allowed to scrutinise the UK’s budget ahead of the European Commission.