European Union (Finance) Bill

Wes Streeting Excerpts

Tuesday 23rd June 2015 Commons Chamber

[Mr Gauke]

I thank my hon. Friend for his excellent intervention. The answer to his question lies at the heart of our response to new clause 1. He raises an important point.

New clause 1 requires the Government to write to the Commission to review the basis of appropriations for the EU budget to see whether “alternative arrangements” would provide better value for money. Although the link between appropriations and value for money is an important one, it is not of the first order. The Government’s first priority is to control spending directly, not through the system of appropriations. Cutting low-value expenditure is the first and most important way of improving the quality of EU spending.

In delivering an historic real-terms cut to the budget, the Government took a decisive step. Within a smaller budget, we also made sure that expenditure was reoriented towards areas that provide higher value for money. Spending on the common agricultural policy will fall considerably as a proportion of the total budget, while spending on research and development and other pro-growth investment will increase. So it is possible to operate within the system of appropriations, if appropriate control is in place.

The new clause none the less raises the question of whether the system of payments and commitments is appropriate for delivering value for money. It is a question that we must ask. It is true that it is an unusual budgeting system and it is not the way in which the UK Government budget. If the EU were starting from scratch, we would not advocate using that system. Yet I do not think anything would be gained by requesting a review of the system—for one simple and compelling reason. The proposed review in new clause 1 has already been set in motion by the new Budget Commissioner, Vice-President Georgieva, through her recent “budget for results” initiative. We obviously cannot say what the review will include, but its terms of reference are widely drawn, providing ample space to review the current budget system, including the system of appropriations, and to explore possible alternative approaches that would offer better value for money and improved financial management.

The UK has publicly welcomed that initiative and has shared its expertise. The Chancellor has made it clear to other Finance Ministers during ECOFIN meetings that that is the UK’s position. The initiative will involve member states, the European Parliament and the European Court of Auditors.

[Wes Streeting (Ilford North) (Lab)]

I am grateful for that update, but perhaps the Minister will tell us what the Government are going to do proactively in terms of their own priorities to deliver the value for money that he talks about, beyond the generalities that we have heard all morning about better value for money, better spending and better priorities. Can we have some specifics? How will the Government exert real influence on that important review?