The Commission proposed, last April, the 2011 draft budget – €142.6 billion (£121,180 million) in commitments appropriations which represents an increase of €1,073 million (£912 million) or 0.8% comparing to the 2010 budget, and €130.1 billion (£110,616 million) in payments appropriations. At a time of severe strain on the majority of Member States’ public finances, where governments are reducing public spending, the Commission proposes an increase of €7,179 million (£6,102 million) or of 5.9 percent on the 2010 budget. Whereas the Council is planning to make considerable cuts to the Commission’s draft EU budget, the MEPs, unsurprisingly, want to increase it. The Council has recently adopted by QMV its position on the EU draft budget 2011. It has agreed to a budget of EUR 141.777 billion in commitment appropriations and EUR 126.527 billion in payment appropriations. Although the Council has reduced the amount of the Commission proposed draft budget there is still an increase of 2.91 percent on the 2010 budget. The Council should have proposed lower figures as the UK has suggested. On 7 October, European Parliament Budgets Committee rejected the position taken by the Council. Unsurprisingly, the 3.6 billion euros in cuts demanded by member states were rejected. The Committee is demanding a 5.9% increase in spending compared to 2010 budget.
The MPs debated, yesterday, the Draft EU Budget 2011. Bill Cash’s amendment “… calls on the Government to reject European Parliament proposals to increase the budget.' was passed. Hence, it was agreed “That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; and supports the Government's efforts to maintain the 2011 EU budget at the cash levels equivalent to the 2010 budget, while ensuring better value for money in EU expenditure; and calls on the Government to reject European Parliament proposals to increase the budget.”
During the debate, Bill Cash made the following interventions:
Mr William Cash (Stone) (Con): We heard a very interesting and comprehensive analysis from the Minister, and I intend to press my amendment (a) to a vote. I agree very much with the sentiments that lie behind the amendment tabled by my hon. Friend the Member for Clacton (Mr Carswell). I wish only that, before tabling it, he had had a word with me about its wording, because I suspect that we would then have been able to arrive at an agreement. For some reason that completely escapes me, however, he decided to go ahead with his wording. I went ahead with my amendment, because I have to recognise that the Government are about to engage in some incredibly important negotiations. They have to achieve a blocking minority, which I shall explain in a moment. That is not just a technical question, but a question of whether the Government can, first, get enough people to vote on the conciliation agreement, assuming that we reach such a point, and then achieve a blocking minority so that the Commission has to propose a new budget. That is what we are fighting for.
Mr Denis MacShane (Rotherham) (Lab): Does the hon. Gentleman agree that to secure such leverage in the conciliation process, it is not helpful if the main Government party is in alliance with those whom the Deputy Prime Minister calls nutters, homophobes and anti-Semites from extreme fringe parties in east Europe, and not in the same family as Mrs Merkel, Mr Sarkozy and other centre-right leaders?
Mr Speaker: Order. May I gently say, with reference to the right hon. Gentleman's intervention, and as an encouragement and a cautionary note to the hon. Member for Stone (Mr Cash), that I know the hon. Gentleman's response will very much focus on matters relating to the European budget?
Mr Cash: It will, indeed. I shall make no response to that absurd intervention. We must achieve our objectives, which are not only to prevent any increase in the budget, but to reduce it. I say that to my hon. Friends as one who, I think, can undoubtedly claim to have fought these battles relentlessly, persistently and consistently for the best part of 25 years-and, if I may say so, with some degree of success in establishing the parameters within which we are now able to address the European issue. In a moment I shall mention what happened at the European Scrutiny Committee this afternoon, merely to illustrate the progress that we have already made in the few weeks that I have had the honour of being the Committee's Chairman. The whole process has to be conducted in an effective and orderly manner. Otherwise, it plays into the hands of those such as the right hon. Member for Rotherham (Mr MacShane), who want to pretend that somehow there is no justification for our adopting the position that we need to adopt. Tortuous and tedious as it is, the most important thing is to get it right. We have to get the blocking minority if we want to move from wanting to stop the increase to achieving the reduction that follows from it. Let us be responsible about this. I do not have the slightest objection to the sentiments that lie behind the other amendment. It bothers me, however, that we have two amendments that appear to compete with one another, but in fact convey the same ideas, yet one is orderly while the other is disorderly. I leave it at that; it is for my hon. Friends to judge–
Mr Geoffrey Cox (Torridge and West Devon) (Con): Does my hon. Friend accept that Mr Speaker has already said that the amendment in the name of my hon. Friend the Member for Clacton (Mr Carswell) is in order; that there is nothing inherently unlawful about it; that there is no reason, based on either law or principle, why Members of this House should not vote for it; and that it is therefore perfectly in order?
Mr Cash: When I say that the amendment is disorderly, I mean that it would, in my judgment, make it more difficult for us to achieve our objectives. I was not referring to it as being disorderly within the framework of the procedures of the House. I make that distinction very clear. Our net contribution to the European Union is rising from £6.4 billion this year to £8.3 billion in 2011-12 and £10.3 billion in 2015, and our gross contribution is rising from £14 billion to £19 billion. The Budgets Committee is placing a demand on member states to open negotiations on new own resources;
the hon. Member for Birmingham, Edgbaston (Ms Stuart) says that that is a "full part of the overall agreement on the 2011 budget".
It is reported in the Financial Times that MEPs are even considering an amendment to "open the way to establish a European tax, making the institutions less reliant on contributions from national governments."
On top of the budget, the European Parliament is shortly expected to vote on proposals to extend maternity rights to 20 weeks at full pay, which will cost the British Government an extra £2.5 billion a year.
It will be well understood in the House that I am gravely concerned about the developments in this direction. I merely want to be sure that the Government, as well as being able to negotiate this particular, rather difficult round, are able to get stuck into reducing not only the budget itself but the functions that lead to that budget, because the two run together-it is like Parkinson's law.
Mr Bone: My hon. Friend is making a powerful speech on something about which he knows more than anybody else in the House. His amendment would freeze the budget, while the other amendment calls for a reduction. That may be difficult to achieve, but would it not be helpful, rather than a hindrance to the Minister, as she flies off tomorrow, to know that a certain number of Members want a cut?
Mr Cash: That has to be a judgment for Members in deciding which way they will vote on these amendments. In my view, because of the complexity of this problem and the uncertainties about whether we will be able to achieve a blocking minority in the Council of Ministers-I shall explain the procedure in a minute-we much do nothing that would play into the hands of the Eurofanatics in some of the other member states who want to go down the same route as the European Parliament by endorsing this increase and increasing the budget resources, which is what they are intent on doing in the wake of the Lisbon treaty. That is the problem. It is a matter of judgment, but it is also one of analysis, which is why I take the position that I do.
I may say that I had no discussions whatever with the Government on this issue. I simply tabled my amendment last night because it struck me that in the light of the discussions in the European Parliament-and not in light of the amendment tabled by my hon. Friend the Member for Clacton, which I had not seen-the European Parliament was being thoroughly irresponsible, or at any rate the Budgets Committee was. We have yet to discover whether the European Parliament will persist in the same view.
On top of the proposal for the European budget, there is one to extend maternity rights. It is now clear that it is intended to have a £3 billion increase in the European budget for that reason. The 27 member states will be snubbed if the European Parliament votes in line with the European Commission's proposal. Recent increases do not include the already agreed, and grossly extravagant, €1 billion increase in the European budget for 2010, which was caused largely by the Lisbon treaty.
On the subject of austerity and responsible measures, according to Government figures the collective budget deficit of the EU's 27 member states will reach the staggering sum of €868 billion this year, which is more than 7% of the bloc's gross domestic product. That, of course, is because the European financial crisis is real.
One need only look at the countries otherwise known as PIGS-Portugal, Italy, Greece and Spain-not to mention France, which must be included in a lot of the analysis, to see the real implications of that for the individual lives of voters in this country. The governing economic and financial framework established by the EU must be not only revised but radically curtailed. The budget increase also relates to the extensive bureaucracy that we are having to pay for, such as the European External Action Service, as my right hon. Friend the Member for Wokingham (Mr Redwood) rightly pointed out. Members, including me, raised the gravest objections to the proposals for that body that were made a few weeks ago.
While Westminster and Whitehall, and the country at large, are quite rightly being asked to make savings, what is happening in Brussels? The European Parliament adopted a resolution on 18 May proposing a budget of €1.707 billion, which is a 5.5% increase on the amended 2010 budget and represents 20.28% of the EU's administration budget.
Kwasi Kwarteng (Spelthorne) (Con): Many Conservative Members would broadly agree with my hon. Friend's sentiments; I do not believe there is much division among us on the matter. What practical steps does he think Her Majesty's Government can take to stop the grotesque expansion in the budget?
Mr Cash: The budget is part and parcel of the issue of parliamentary sovereignty, which I shall come on to in a moment. If we are to act properly and responsibly in our own Parliament, we shall have to deal with this Parliament's relationship with the EU as a whole. If we get that right, we can proceed in an orderly manner to the questions that we must ask in the political environment that we now experience. That will ensure that we are not subject to further increases in European functions or to the assertions of the European Court and other European institutions on the sovereignty of this House.
Robert Halfon: Although I accept what my hon. Friend says, does he not agree that by the time all that has been done, the budget increase will have gone through?
Mr Cash: With great respect to my hon. Friend, with whom I have had many useful discussions on this matter over the years, I do not agree for the reason that I have already given. It all depends on whether, as a result of the forthcoming negotiations, we achieve a blocking minority in the vote on the conciliation agreement. That agreement has not yet been mentioned, but regrettably it is integral to the procedures that we now face. I fear that there might be a slight misunderstanding, because I suspect that all Members on the Government side of the House-or even all those in the Chamber-and many people in the Conservative party and the country at large, would agree with both amendments. The distinction I am drawing between them is simply that in the real world we must address such matters in a certain fashion. I do not want to advance my amendment simply because it is mine. It will not do any good if we go too far in merely expressing a sentiment with which everyone agrees, if the consequence of doing so is a counter-productive result. That is why I am taking the position outlined in amendment (a). I urge my hon. Friends-not for my sake, but simply for the sake of ensuring that we get things right-to support it.
Mark Tami (Alyn and Deeside) (Lab): The hon. Gentleman is part of a coalition Government-or at least part of a coalition. What discussions has he had with his Lib Dem colleagues on the grand plan that he is setting out to skewer the EU budget?
Mr Cash: As a matter of fact, it is pretty obvious that I am not a member of the coalition Government, so let us dispense with that idea straight away. In my votes over the past few weeks, I have probably demonstrated that I have certain reservations about the situation, but I am not going further down that path now. If the European Parliament is allowed to get away with this, it will add fuel to fire of the riots and demonstrations that are already sweeping many cities in different countries throughout Europe. Those countries face problems of immigration, economic stress and high unemployment, and to wilfully attempt to increase the EU budget when the whole thing needs to be rejected is, to my mind, irresponsible. If the EU Parliament persists, it cannot be regarded as a serious and responsible Parliament. That is my concern.
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Michael Connarty: I am grateful to my ESC colleague, who is now Chair of the Committee. I do not disagree with his facts and many of his criticisms are fundamental to the approach of the European Commission compared with that of the UK Government and this Parliament, particularly on the proposal for a tax. However, on trying to achieve a blocking minority, would it not be better in fact to support the Government's proposal than to take an absolutist approach such as the one he proposes in amendment (a) and, quite frankly, the one that is proposed in amendment (b)?
Mr Cash: Mine is not an absolutist position in the sense in which the hon. Gentleman puts it. My amendment (a) says that an increase is simply not justifiable. What is justifiable could also be described as what is fair and right. I have just described what I suspect will happen throughout Europe if people continue to increase the budget irrespective not only of our spending review, but of the crisis in Greece and of the situations in other member states, including very high levels of unemployment, the rise of nationalism that goes with that, and the populism that will emerge from those who want to agitate and create trouble. We want a stable Europe and a stable United Kingdom, which is precisely why I take the view that we need to act responsibly and ensure that the UK Government have every opportunity to achieve their objectives. I assure the House that nobody can accuse me of being in any way reluctant to speak my mind on matters relating to the EU, and I am sure that no one would presume to do so.
Mr Dodds: I commend the hon. Gentleman for his long years of campaigning on this issue and his work as Chairman of the ESC. Given the provocative behaviour of the European Parliament and its attitude to a budget increase, which he outlined, should this House not put down an equally strong marker by strengthening the Minister's negotiating hand and saying, "Far from increasing or freezing the budget, we want a reduction"?
Mr Cash: I do not want to enter into an unnecessary altercation about this with my hon. Friend the Member for Clacton, but if the wording had been put to me, I would have included the words "and if the European Parliament and its committee persist in the behaviour that they are now engaged in, we would have to call for a reduction in the budget." It would be on that basis, not on the basis of requiring the Government to respond when they are in the process of negotiations. Perhaps the distinction comes at that point, although I agree with my hon. Friend's sentiments.
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Mr Cash:… It is clear in the light of the current state of affairs that the Government should adopt my amendment and reject the increase. The European Parliament, in the current austerity conditions, is wilfully affecting the economies of the 27 member states, and of the United Kingdom in particular. My European Scrutiny Committee has today agreed to have a full inquiry reaffirming the sovereignty of the United Kingdom Parliament in relation to the assertions of the European Court of Justice on such matters. The Government have agreed to the Committee's demand for pre-legislative scrutiny, and I am happy to announce that the Minister for Europe will give evidence in public on these critical matters-and that will have an impact on the issues that we are discussing in this debate-as will other experts on the compatibility of Britain's membership of the European Union with the doctrine of parliamentary sovereignty in the light of the European Union's own assertions that the parliamentary sovereignty of this Parliament has been overtaken.
The Government have announced that they will introduce a clause to address the question of parliamentary sovereignty, but our Committee will examine the implications of this in the light of the declaration of primacy of European law by the European Court of Justice and as contained in the Lisbon treaty. All these matters require the closest analysis for the sake of our democracy and the electors of the United Kingdom on questions relating to taxation, spending, the European budget, our contributions and all the functions of the European Union. We have an absolute requirement to get this right and we will have a full examination of the issue of parliamentary sovereignty, including the subject matter of this debate.
Mr Philip Hollobone (Kettering) (Con): Does my hon. Friend believe that it would have been helpful if the Minister for Europe had been in his place for this debate?
Mr Cash: It is always helpful when the Minister for Europe is present, and I endorse my hon. Friend's view. However, the Economic Secretary has set out the Government's view and their determination to get the negotiations right. They will have to succeed in that aim, because there is a huge amount at stake. The Commission submitted its draft budget to the Council of Ministers and the European Parliament, but the Council rejected the Commission's proposals by qualified majority vote. The proposals then passed to the European Parliament. In the next few days, it is expected that the European Parliament will adopt the amendments to increase the budget and forward the amended draft to the Council of Ministers and the Commission. The European Parliament and the Council will then convene a conciliation committee to seek to resolve their differences, if any. It is essential that the Government negotiate a blocking minority of 91 within the Council of Ministers to stop the increase at that point. The decisions will be taken by a majority of 14 out of 27 MEPs on that conciliation committee, together with a majority of the 27 member states on the Council of Ministers.
That is why it is vital that the Government have the strongest possible mandate to negotiate a blocking minority to determine whether there is agreement in the conciliation committee on the joint text-as I am sure is the intention. If both the MEPs and the Council of Ministers, through their respective procedures, reject the joint text, or if one rejects it and the other fails to take a decision-this point is crucial, and that is why this is such a delicate matter-the European Commission is bound to propose and submit a new budget that will deal with the problem properly. That is why I take the position that I do in my amendment. I am in no way detracting from the sentiments expressed by my hon. Friend the Member for Clacton. I absolutely endorse those objectives; indeed, I have advocated them repeatedly-relentlessly-over the past 20 years. However, there comes a moment in the tide of man, as they say, when it is essential to get the responsible procedures working in an orderly manner. I do not in any way want to find the Government's position compromised by a vote that could take place this evening, the effect of which would be to put the Government position into reverse.
We are at a crucial moment. I very much respect my hon. Friend's objectives, but in this context it is important to get things right. On this occasion, I would strongly urge my hon. Friends to accept my amendment and allow the Government to proceed on that basis, rather than on the basis of something based on a hypothesis.
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Mr Cash: Does the hon. Gentleman agree that the root of the problem is not only the EU budget, but EU functions, which were greatly increased by the Lisbon treaty? The ESC agreed this afternoon that we will examine fully the question of parliamentary sovereignty as against European functions. Does he also agree that a precondition of reducing EU functions is asserting UK sovereignty, and requiring the judiciary to give effect to Westminster legislation and to override European legislation as and when necessary?
