Fund for European Aid to the Most Deprived

William Cash Excerpts

Tuesday 18th December 2012 Commons Chamber

[Mr William Cash (Stone) (Con)]

To paraphrase President Hollande, with whom I have no doubt those on the Opposition Front Bench are in agreement, a Euro handout is not just for Christmas, but for life.

As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) pointed out, subsidiarity is the issue in this debate. I could spend a great deal of time debating this, but the European Scrutiny Committee’s report sets out some of the aspects in more detail. The Government have set out their arguments in the explanatory memorandum and the Minister has spoken, so it seems to me that on this occasion it would be more appropriate to deal with the question of subsidiarity than to attempt to deal with the questions that arise regarding the relationship between the member states themselves and the United Kingdom.

A reasoned opinion is a new procedure provided for under the Lisbon treaty. It provides a mechanism for challenging Commission legislative proposals on the grounds of subsidiarity. In a nutshell, it means that national Parliaments have eight weeks, from the publication of a proposal, to submit a reasoned opinion. If such opinions represent one third of all the votes of national Parliaments, the Commission has to reconsider its proposal. The deadline in this case is midnight Brussels time on 26 December 2012, which is why the debate is taking place now.

I am glad to read in the motion that the Government agree with the Committee’s proposals. I was also extremely glad to hear the shadow Minister effectively say that the Opposition agree with the principles that underpin our reasoned opinion. The motion before the House is to approve the draft reasoned opinion, which is set out in the annex to chapter 3 of the report, and to instruct the Clerk of the House to forward it to the presidents of the European institutions. That is the formality.

The purpose of the draft regulation is to establish a new fund for European aid to the most deprived with, as the Minister said, a proposed budget of €2.5 billion for the period 2014-2020. I am bound to point out that those years reflect the period of the multi-annual financial framework on which a number of us voted recently, with respect to the European budget, saying that it should be reduced. The object in this instance, however, is:

“to alleviate poverty and material deprivation in the EU by supporting national schemes for the distribution of food products and the provision of basic consumer goods for the personal use of homeless people or children. It would replace an existing EU Food Distribution Programme…in place since 1987”.

The new fund will be based on the EU cohesion policy and resourced from the structural funds.

With respect to the draft reasoned opinion, we conclude that the proposed legislation breaches the principle of subsidiarity for four reasons. The Commission says that there is uncertainty about the ability of some member states to provide the social investment needed to prevent further fracturing of social cohesion, but it does not demonstrate that all member states are in the same position. Furthermore, there is no evidence about which member states are unable to provide this investment. The draft regulation would, however, bind all member states.

Secondly, the Commission has not provided sufficient justification for EU action on the basis of the Europe 2020 strategy—we go into that in more detail in our report, which is available to the House. A principal objective of the proposal is a desire for a highly visible EU funding instrument to mitigate negative perceptions of the EU’s contribution to economic and financial crisis. The Committee argues that such anxieties, whether founded or unfounded, are not a legitimate basis for EU legislation.

I would argue that the answer to alleviating poverty and preventing the difficulties being experienced in member states lies elsewhere. No one can doubt that the difficulties in many member states—youth unemployment running at over 53% in Spain and Greece and vastly increased unemployment among young people and others in all member states, with one or two exceptions—are the result of the economic policies that have been pursued under the existing treaties. The answer lies in growing small and medium-sized businesses. The taxation then taken from their profits could be ploughed back into the relevant part of the public sectors in each member state—including in this country—to provide the kind of help that the Government here have rightly indicated they will provide in order to alleviate poverty, where it is necessary to do so.

The question of whether these anxieties are founded or unfounded is not a legitimate basis for EU legislation. For EU supranational intervention on poverty and social exclusion in member states to be justified, there must be evidence of a problem that cannot be satisfactorily addressed by action at national level in all member states, but this evidence is simply lacking. I am glad to note that both the Minister and the shadow Minister agree with that proposition, and I repeat that the answer lies in growth, although how we get that growth is the subject for a separate debate.

Another problem is that the rule of law, which is the basis on which the much-vaunted aspirations of the EU are meant to be based, is consistently being breached. I could give many such examples; we have reported on them in the past. There is article 122 in respect of the European financial stability mechanism, there are the breaches of the no-bail-out clauses, the failure of the rule of law in respect of the stability and growth pact and the 25/27 decision that the Prime Minister vetoed but which is still subject to a legal reserve. There have been many other instances and they are continuing.

The principle of subsidiarity, which is embedded in the treaties, is meant to mean that, where matters should be dealt with at member-state level, that is where they should be dealt with, and the EU and its institutions should not arrogate to themselves the alleged right to legislate or impose burdens on member states in contravention of the legal requirements prescribed by the treaties, one of which is subsidiarity. It so happens that in the Lisbon treaty member states agreed to this procedure for reasoned opinions, which is a way of challenging a breach of the rule of law. For precisely that reason and in the light of the arguments I have set out, we put forward this reasoned opinion.

There simply is no basis in existing legislation to justify the use of this €2.3 billion for the purpose described by the European Commission. The Commission’s impact assessment states:

“European financial support can demonstrate the direct solidarity of the Union with the poor people, thus taking up on the broad request by European citizens.”

It is difficult to understand what that is supposed to mean in practice. It is just a generalised description, rather than an analysis of the use of the power for the right purpose. I am bound to ask the Minister, therefore, whether he thinks that the cohesion funds—resourced as they are by member states—should be used to

“demonstrate the direct solidarity of the Union with the poor people”

in those member states. On the use of expressions about demonstrating direct solidarity with the poor people, I am bound to say that, yes, people are being seriously adversely affected, but we should be asking what the real cause of that is, and whether this is the right way to try to solve the problem. Those generalised expressions of anxiety are not the way to run the European Union.

[Jacob Rees-Mogg]

Does my hon. Friend agree that that is the most extraordinarily condescending language for people who are on very high salaries and paying very low taxes to be using?

[Mr Cash]

I could not agree more, and I would love to go down that route. I will not do so tonight, but the overpayment of civil servants in the European Union is a scandal.

Does the Minister believe that there is evidence of a broad “request by European citizens” for this type of supranational financial support? From what he has said, he clearly does not. The Commission’s impact assessment also states:

“Currently more and more social stakeholders and EU citizens perceive the EU as a threat for their personal and collective protection.”

It goes on:

“Action at European level is required, all the more so, as a lack of social cohesion would hinder the Union's further development and undermine its legitimacy in the eyes of its citizens.”

In other words, this aspiration is based on the fact that the Commission wants to create a perception that the European Union is helping people, and it is then calling for a vast amount of money to justify that perception. In a way, this is an exercise in legitimised propaganda.

The Committee found that statement startling on a number of levels. Does the Minister agree with the Commission that the EU is perceived as a threat to the “personal and collective protection” of its citizens? Does he think it legitimate for this type of humanitarian funding to be used to reinforce the EU’s legitimacy? This is almost akin to Soviet propaganda.

A constant complaint by our Committee is that the Commission does not pay sufficient attention to the need to confirm that its legislative proposals comply with the principle of subsidiarity. I have given the House some instances of breaches of the rule of law. What kind of Government does the Commission purport to run, if it breaches the rule of law whenever it suits it to do so? When it was breaking the rules on the European financial stability mechanism, for example, Madame Lagarde came out of a meeting and said, “We’ve violated all the rules because we want to preserve the euro.” The thinking, which is very dangerous, seems to be: “Providing we can use the power that the member states have given us to get what we want, it does not matter whether we can justify our actions according to the rule of law or the principle of subsidiarity. We’re going to do it anyway, and we’re going to justify it by talking about people’s perceptions.”

It is no wonder that people like me get up repeatedly—like pestering wasps, as I said to the Prime Minister the other day—and try to ensure that we keep the European Commission under surveillance and control. That is precisely what the European Scrutiny Committee is doing. We are ensuring that these matters are properly looked at, and I am delighted that the Government are going with us on this occasion. In this instance—believe it or not—the word “subsidiarity” is not even mentioned in the Commission’s explanatory memorandum. Will the Minister give us his assessment of the Commission’s assertion that the proposal does comply with subsidiarity? Does he agree that, in order to warrant supranational action, the Commission must show that the provision of emergency aid in some member states is undermining social cohesion in others, and that there is a genuine cross-border element involved?

I am arguing the case on subsidiarity, never mind on the justification of the arguments on the merits of giving money. It is an utter, complete and devastating tragedy that people all over Europe are resorting to using food banks. I sympathise with the concerns of the hon. Member for Liverpool, Wavertree (Luciana Berger) about those very people. I do not have any problem there. It is one of the reasons why I spend as much time as I can on matters relating to international aid in countries throughout the world and in the Commonwealth. I am concerned about these people, but we cannot use this sort of legislative framework because of the misuse to which it is being subjected. So does the Minister think that the Commission has proved the existence of this cross-border element?

[Mr Hoban]

No.

[Mr Cash]

I am delighted to hear that. This is where it gets tricky for us as a Parliament. We generally agree that this is not the right thing to do and I believe that the Opposition agree with that in terms of subsidiarity, although they have expressed their view about the question of the merits. The problem is that the number of reasoned opinions on this proposal will fall far short of the minimum required to oblige the Commission to reconsider. However, in the opinion of the Committee, that does not mean that a reasoned opinion of the House of Commons is without meaning or consequence.

Finally, will the Minister tell us whether—and, if so, to what extent—the Government plan to make use of the reasoned opinion in the Council negotiations on this proposal. As I said to the Prime Minister on another subject, it is difficult—he is between a rock and hard place. There are dilemmas, but we as a Committee have a job to do, which is to point out where the subsidiarity has been breached and to present a reasoned opinion. What really troubles me is that we do our job and look to other member states that are constantly berating us for our so-called “attitude” towards the European Union. However, when there is an absolutely clear-cut breach of the rules that they have set themselves, they turn round and say, “Well, we listened to what you said. We are not going to enter into an argument with you about whether you are right on your reasoned opinion”—they cannot; there is no way that could possibly be justified—and then they say, “But we are still going to vote for it.” That is the way to destroy the European Union, and they are doing a pretty good job.

[Jacob Rees-Mogg (North East Somerset) (Con)]

As so often, the European Union finds itself in these positions essentially by accident. If we look at the documentation, we see that this proposal would replace the existing EU food distribution programme for the most deprived, which has been in place since 1987. That was put in place when the common agricultural policy was building up butter mountains and milk lakes—and, rather excitingly, wine lakes—and it was thought that it would be a good idea to distribute them to member states and the people within them rather than allowing them to rot or having to pay large sums for storage. I cannot remember anybody getting any of the wine out of the wine lake, but that problem went away when the basis of subsidising the CAP was changed and there was a move away from all the payments relating to production. Production fell to be more in balance with demand, so the lakes and the mountains dissipated.

Once the EU as an organisation has its hands on a particular power—[Interruption.]—or piggy bank, it is reluctant to give it up. It sees that it has this power that is no longer of any use because the intervention stores in member states cannot be used to provide food for the needy, so it comes up with a scheme—one that will cost €2.5 billion of our money—to provide a means of distributing that food in deprived member states. It then comes up with the reasons to justify it.

It is worth noting on page 11 of the documentation the justification in the Commission’s explanatory memorandum. It states:

“EU action is justified on the grounds of Article 174 (TFEU) which provides for the Union to ‘promote its overall harmonious development’ by ‘developing and pursuing its actions leading to the strengthening of its economic, social and territorial cohesion’, and on Article 175 (TFEU) which specifies the role of the EU structural funds in achieving this objective and makes provisions for the adoption of specific actions outside the Structural Funds.

EU-level action is necessary given the level of poverty and social exclusion in the Union and the unacceptable diversity of the situation among individual Member States, further aggravated by the economic and fiscal crisis, which has led to a deterioration of social cohesion and lessened the chances of achieving the Europe 2020 Strategy’s objective in relation to the fight against poverty and social exclusion.”

There we see the heart of the matter.

Having bankrupted its member states by making them tie themselves into an overvalued euro, the European Union now says that people are poor and suffering as a result, and that we—the European Union—must therefore look after them. That is like shooting someone in the leg and then ringing for an ambulance. It is a most unsatisfactory way of carrying on, and it does not remove the offence of shooting someone in the leg in the first place. It is, in its way, deeply dishonest, troubling and bordering on wicked that the European Union should force such great austerity on Portugal, Ireland, Spain and, in particular, Greece so that grandmothers in Greece cannot afford their housing, and then come along with a scheme that will give them a little bit of money. Although €2.5 billion of our money is a lot to us who are paying into Europe, it is not a huge amount in the grand scheme of expenditure across member states. It is a little bit of money to spend on a propaganda exercise to persuade member states that things are not as bad as they seem.

[Mr Cash]

Does it not smack rather of the words attributed to Marie Antoinette at the time of the French revolution, when she allegedly said of the starving people of Paris, “Give them cake”?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I should like both hon. Members to return to the specific points that we discussing this evening. The scope of the debate is the subsidiarity issue as outlined in the proposed reasoned opinion, and that is what we should be discussing.