Connecting Europe Facility

Mark Reckless Excerpts

Thursday 19th January 2012 Commons Chamber

[Mr Hoban]

I will set out the Government’s position on the financial framework in my own sweet time.

Continuing financial instability in the eurozone owing to unsustainable levels of public debt makes the case for restraint stronger: the EU budget must be part of fiscal consolidation, not immune to it. As the Prime Minister has stated, alongside leaders from France, Germany, the Netherlands and Finland, the maximum acceptable increase in EU budget size until 2020 is a freeze in current payment terms.

Since November’s debate on the financial framework, we have made significant steps towards achieving that goal. In the face of a Commission proposal to increase the 2012 budget by 4.9%, the UK led the European Council in demanding, and achieving, a restriction of the 2012 budget to a real freeze to 2011 payments. In pursuit of a real freeze in payments, the UK’s position must, and will, be consistent and clear in annual budget negotiations, financial framework negotiations and negotiations on the individual spending programmes that make up the framework, of which the connecting Europe facility is one.

[Mark Reckless (Rochester and Strood) (Con)]

When the Minister refers to seeking to achieve a real-terms freeze, what deflator or measure of inflation is he using?

[Mr Hoban]

The measure that is used in these discussions is the forecast of inflation provided by the EU, which is currently 2%.

The nature and size of these spending programmes are negotiated in parallel with the negotiations on the overall financial framework. That means that the eventual size and shape of the financial framework are influenced by negotiations on those individual programmes. Given our call for a real freeze, any increase in the size of individual programmes means a corresponding decrease in other programmes.