During Yesterday's debate in the House of Commons on the Draft European Union Budget for 2013, Bill Cash made the following speech and interventions:

The Financial Secretary to the Treasury (Mr Mark Hoban): I beg to move,

That this House takes note of an unnumbered Explanatory Memorandum dated 5 June 2012 from HM Treasury on the Statement of Estimates of the Commission for 2013 (Preparation of the 2013 Draft Budget); recalls the agreement at the October 2010 European Council and the Prime Minister’s letter of 18 December 2010 to European Commission President Manuel Barroso, which both note that it is essential that the European Union budget and the forthcoming Multi-Annual Financial Framework reflect the consolidation efforts of Member States to bring deficit and debt onto a more sustainable path; notes that this is a time of ongoing economic fragility in Europe, with countries across Europe taking difficult decisions to reduce public spending; agrees that the Commission’s proposed 6.8 per cent increase in European Union spending in 2013 is unacceptable; agrees that the Commission’s proposal for a larger European Union budget is not the way to fix Europe’s problems, and that large savings are feasible without compromising economic growth; notes that the proposed increase would impose unaffordable costs on taxpayers in the UK and other Member States; notes that UK contributions to the European Union budget have also risen in recent years due to the 2005 decision to give away parts of the UK rebate; and so supports the Government in seeking significant savings to the Commission’s proposals across all budget headings and in its strenuous efforts to limit the size of the 2013 European Union budget.

(…)

Mr Hoban: I am pleased to have this opportunity to discuss the 2013 EU budget.

As Members will know, the economic climate in the EU has changed dramatically in recent years, and the situation remains fragile. The uncertainty in the euro area is the biggest challenge facing the EU economy, and there is a risk that it will affect growth and jobs in Britain. That is why we have pressed the euro area to address both the immediate challenges and the long-term systemic issues that it faces. In the midst of one of the biggest debt crises to hit Europe, this Government and Governments across the EU have made difficult decisions in order to consolidate their public finances and implement structural reforms.

The EU budget, funded by EU taxpayers, cannot be immune from the changes that are sweeping across Europe. An ever-increasing EU budget is not the way in which to fix Europe’s problems, and it is time for the EU to live within its means. That requires a strict reprioritisation and the targeting of areas that support growth and reduce the waste and inefficiency that has become characteristic of EU spending.

(…)

Mr William Cash (Stone) (Con): My hon. Friend is making a powerful case and I take it seriously. I do not in any way suggest cynically that the Government are merely trying and not succeeding, but when I see the words

“seeking significant savings…across all budget headings and in…strenuous efforts to limit the size”,

I feel that there is another answer. In the light of his powerful argument, which has not yet even finished, there is a strong case for our saying that we insist, rather than merely seek, and for saying, “We will not pay any more. We will refuse to do so if you are not prepared to do something about it.” This really is getting out of control, as is the work load of law that we discussed in the previous debate.

Mr Hoban: I will come on to deal with the process of negotiation that we are going through, but my hon. Friend will, of course, be aware that the EU budget is determined by qualified majority voting, whereas the framework is determined by unanimity. As he said, he has practised law for some time, so I am sure that he would not be encouraging us to break the law—

Mr Cash rose —

Mr Hoban: Or perhaps he is.

Mr Cash: I am grateful to my hon. Friend for walking straight into that one. He knows the formula that I have adopted in the past, notwithstanding the European Communities Act 1972. I have put it to the Prime Minister, and the European Scrutiny Committee report endorsed it as a potential weapon. I simply say to my hon. Friend that there comes a point when we simply have to draw a line and we may have to override European law. The EU breached the law with the stability and growth pact and the fiscal compact. I think it is about time we started showing a bit more mettle.

Mr Hoban: I have to say that I always thought it was appropriate to obey the law, even in circumstances where we would perhaps rather not do so. We need to take our obligations seriously, but that does not in any way weaken our resolve to get the best possible deal for British taxpayers.

Jacob Rees-Mogg (North East Somerset) (Con): I am sure that the Minister has as much backbone as Margaret Thatcher had. She went along to European Councils and said, “Give us back our money.” I think that is the line he should take.

(…)

Mr Cash: I am glad that the hon. Gentleman used the phrase “strength of feeling”. What is his strength of feeling about the fact that every justification for proposing an increase of 6.8%, in all the papers that I have read as Chair of the European Scrutiny Committee—everything in the European Parliament and the multi-annual financial framework discussions in which I took part a few months ago—is, “We need to do it because of the Lisbon treaty”? Will the hon. Gentleman, on behalf of the Opposition, now accept that the Lisbon treaty was a great mistake?

Chris Leslie: No. Some commitment appropriations are certainly being pencilled in—“We can’t undo the budget because of previous commitments.”—but almost an equal number of appropriations are new programmes that the European Commission could vary and change. I am all for expenditure at European level and doing our part collectively to boost and stimulate economic growth, but there is not sufficient justification for some of the continued administrative back-office areas of expenditure that simply do not help at this time, especially when we have so many economic difficulties in the UK.

My question to the Minister is very simple: what exactly is the Government’s position? Are they in favour of a real-terms reduction in the budget or not? The Minister would not say. I urge his hon. Friends to try to pin down the Government on that, because we are at a crucial juncture. From reading the reports this week in The Guardian about a deal being done whereby we will not touch reform of the common agricultural policy, for example, I get the sense the Prime Minister likes an easy life with business as usual and wants to continue in that vein.

(…)

Mr Cash: On a broader question, will my hon. Friend consider that if we were to consider a Swiss-style relationship with Europe and negotiate a proportionate drop in our net contributions, we could reduce the amount we pay to no more than £1.3 billion, saving nearly £7 billion? Does he find that an attractive idea?

Chris Heaton-Harris: Anything that saves UK taxpayers significant sums of money I deem worthy of further investigation.

There are lots of areas in which the Government, working with others on the Council and Members of the European Parliament, who have an opportunity to amend the budget, can do a lot more, but only if there is a tiny threat that we might not want to increase our contribution at all. We have the reason to do it—the accounts not being signed off—but a urge the Minister to consider the opportunities that present themselves in the coming years. I support the Government in trying to reduce our budgetary contribution. I know that it is unbelievably hard work—I have sat in on these trilogue meetings in Brussels—but it is worth the effort, because we could save the UK taxpayer billions of pounds.

(…)

Mr William Cash (Stone) (Con): The debate is extremely important, particularly in the light of what we heard from the Foreign Secretary this morning, because it is about our relationship with the European Union. As I said in my response to the Foreign Secretary’s statement, it is fundamental that we concentrate not merely on powers, but on democratic power. The debate is about sovereignty and tax and spend, it is about how much we should contribute, and—as I said to the hon. Member for Nottingham East (Chris Leslie)—it is about the increase in functions that has led to the increase in the budget. The hon. Gentleman knows that, and we know it. The fact is that the Lisbon treaty should never have been allowed to go through. The budget question is at the heart of this, and I say no, no, no.

Neil Parish (Tiverton and Honiton) (Con): My hon. Friend is absolutely right. If we want to curb the powers of the European Union we should pay it far less money, which it should spend more efficiently, and, given that Europe is facing austerity, it is entirely wrong to ask for a 6% increase.

Mr Cash: It is indeed. In fact, the Commission is asking for 6.8%. I agree with the Minister that the Government have fought hard, but they have not fought well enough. Although an amendment that I tabled last year proposing no increase was accepted by Members on both sides of the House, we ended up with a 2.5% increase. I think I am right about that, although the Minister appears to disagree. As for the year that we are discussing now, we need to ensure that, if necessary, we take firmer steps in the light of the changed relationship that has resulted from these times of austerity.

I think that we should say no and ensure that the amount in question is at worst a flat increase. Furthermore, I think that we should say no to the final results. QMV does not impress me: other member states have been breaking the law all over the place, particularly Germany and France over the stability and growth pact. The whole of the fiscal compact was unlawful. It is time that we took a firmer line. We are a major net contributor to the EU budget, of which, last year, 45% was spent on policies for sustainable growth, 41% on the preservation and management of natural resources, and the rest on, for instance, “the EU as a global player” and administration. We are the second largest net contributor after Germany. The current annual budgets under the multi-annual financial framework are going in the wrong direction. We should restrain all further expenditure to the EU. We must take action on the gross payments. The gross payments, less abatement, were £12.915 billion in 2010, up from £8 billion in 2005. There is an ever-growing increase in real terms. That is unacceptable in a time of austerity.

I shall conclude by referring to a point I have already made. We must change our relationship with the EU in the way anticipated by those of us who would make the most of what the Foreign Secretary said earlier today, and we must do so sooner rather than later, and certainly before 2014. If we were to adopt a Swiss-style relationship and negotiate a proportionate drop in our net contributions, we would be able to save at least £7 billion for the British taxpayer. That is the direction we should go in. It is time that we said no, not maybe.

Mr David Nuttall (Bury North) (Con): As ever, it is a great honour to follow my hon. Friend the Member for Stone (Mr Cash).

The facts are simple. The net out-turn figures are £9.2 billion for 2010-11, £8.7 billion for 2011-12, £6.9 billion for 2012-13 and £8.3 billion for 2013-14. At a time when we are cutting our budgets here in the UK, the fact is that, whatever happens in the negotiations, those in Europe and Brussels want the European budgets to be increased. Meanwhile, my constituents are seeing their budgets being cut. This serves to highlight the fact that we would be better off out of the EU.

Question put, That the amendment be made.

The House divided: Ayes 141, Noes 234.

Main Question put and agreed to.

Resolved,

That this House takes note of an unnumbered Explanatory Memorandum dated 5 June 2012 from HM Treasury on the Statement of Estimates of the Commission for 2013 (Preparation of the 2013 Draft Budget); recalls the agreement at the October 2010 European Council and the Prime Minister’s letter of 18 December 2010 to European Commission President Manuel Barroso, which both note that it is essential that the European Union budget and the forthcoming Multi-Annual Financial Framework reflect the consolidation efforts of Member States to bring deficit and debt onto a more sustainable path; notes that this is a time of ongoing economic fragility in Europe, with countries across Europe taking difficult decisions to reduce public spending; agrees that the Commission’s proposed 6.8 per cent increase in European Union spending in 2013 is unacceptable; agrees that the Commission’s proposal for a larger European Union budget is not the way to fix Europe’s problems, and that large savings are feasible without compromising economic growth; notes that the proposed increase would impose unaffordable costs on taxpayers in the UK and other Member States; notes that UK contributions to the European Union budget have also risen in recent years due to the 2005 decision to give away parts of the UK rebate; and so supports the Government in seeking significant savings to the Commission’s proposals across all budget headings and in its strenuous efforts to limit the size of the 2013 European Union budget.