Multiannual Financial Framework

Mark Hendrick Excerpts

Wednesday 31st October 2012 Commons Chamber

[Mark Hendrick (Preston) (Lab/Co-op)]

I am pleased to follow the hon. Member for Banbury (Sir Tony Baldry), although I took exception to some of his comments about the Opposition’s view.

I have served in Parliament for 12 years, and I supported increases to the EU budget, but this time, with the depth of the recession and a double-dip that was predicted before the general election, clearly the economic conditions are very different. Although the case is being made for a cut on the grounds that the economy is doing badly, I wonder how many Government Members would make the case for an increase when there is growth in the economy and Europe is doing well, as it has in the past.

In times of austerity, it is clear that there is no popular mandate for an above-inflation increase in the multiannual financial framework. The Opposition have outlined the need for a real-terms cut in the budget for 2014 to 2020. I will not revisit the arguments—they have already been articulated by my colleagues—but on the question of the veto, the Prime Minister has no friends in Europe. I was on the Select Committee on Foreign Affairs visit to Berlin; I have spoken to the Germans and others from elsewhere in Europe in recent months. The Prime Minister was bragging today that he has a veto and is not afraid to use it. That is like the madman with a gun—“I’ve got a gun and I’m not afraid to use it”—but the trouble is that the gun is pointing at the Prime Minister’s feet, and he will isolate himself even more as he goes into those important negotiations in November.

I would like to address the need to look at budget reform, particularly the pressing need to retain and strengthen the aid budget delivered through the general EU budget, which is about 70% of the EU’s total spending on aid. The EU institutions are the world’s second largest aid donor behind the US, disbursing $12.6 billion of development assistance in 2011. Combined with the aid provided by each member state, the EU is responsible for some 60% of the world’s official development assistance. That is something to be commended. I am sure I do not need to remind the Financial Secretary, but the coalition agreement states:

“The Government believes that even in these difficult economic times, the UK has a moral responsibility to help the poorest people in the world. We will honour our aid commitments, but at the same time will ensure much greater transparency and scrutiny of aid spending to deliver value for money for British taxpayers and to maximise the impact of our aid budget.”

The European Commission’s “Proposals on external action instruments”, published in June last year, provided the basis for negotiations on development assistance in the multiannual financial framework. The European Commission proposes a 19% real-terms increase in the EU budget-financed development co-operation instrument. I am all for us cutting the contribution for this country; at the same time, I do not think that we as a developed nation should neglect the poorest people in the world. I hope that the Financial Secretary and the Prime Minister, when he goes into those negotiations, will support the Commission in securing a well above-inflation increase in the development co-operation instrument. That would mean an increase from €17.2 billion in 2007 to 2013 to €20.6 billion. I would also like to see budgetisation of the European development fund, which for a number of reasons is outside the European Union budget, in addition to major reform of the common agricultural policy. The CAP amounts to about £45 billion, with the UK contributing around £1 billion. In relation to aid policy, the CAP undermines international trade liberalisation and distorts trade, running counter to the objectives of the aid budget.

It is easy to lose sight of the human tragedy of poverty—the inability to pay for medicines to help a sick child; not knowing where one’s next meal will come from; war-torn countries without the basic infrastructure to support communities. Britain has moral authority in this area, but we can retain it only if we remain committed to a real-terms increase in the EU aid budget and a real-terms decrease in Britain’s contribution to the EU budget.