Multiannual Financial Framework

Chris Bryant Excerpts

Wednesday 31st October 2012 Commons Chamber

[Greg Clark]

Let me make a bit of progress and then I shall, of course, give way to hon. Members on both sides of the House.

Our opposition to the demands of the Commission is more than a matter of headline figures alone. When we dig down into the detail, there is always something repellent to find. For example, let us consider the EU administration costs. Members may not be aware that the pay of employees within the EU bureaucracy increases automatically each year. There is, however, a sensible provision to set this aside at times of economic crisis yet, unbelievably, the EU Commission is taking the EU Council to court to insist that the EU is not experiencing a time of economic crisis and that pay should rise. This is the same Commission that has attended four ordinary and three emergency European Councils during the past 12 months to agree unprecedented measures to bail out member states which have been unable to fund themselves without help. So while some member states face a crisis of solvency, the institutions of the EU face a crisis of credibility.

[Chris Bryant (Rhondda) (Lab)]

I welcome the right hon. Gentleman to his post. I have known him for a long time and he has always been a very good pro-European. One of the elements that determines how much Britain pays towards the EU is VAT. If we increase VAT in this country, it means that we pay more money to the EU. Can he tell us precisely how much more we are paying by virtue of the increase of VAT to 20%?

[Greg Clark]

The hon. Gentleman may have known me for a long time but he has a faulty memory. It was his Government—he served, I think, as Europe Minister in that Government—who gave away half of our rebate, which caused the increase that we have seen.

Though they are ready to lecture others on fiscal discipline, it is fiscal incontinence that characterises the approach of the European institutions. Administrative costs need to be hammered down to bring them into line with the modern world, yet the response of the Commission’s spokesman has been little short of insolent. The British Government asked the Commission to model cuts of €5 billion, €10 billion and €15 billion to its staffing budget, and the Commission refused. Its spokesman said:

“We declined as it’s a lot of work and a waste of time for our staff who are busy with more urgent matters…we are better educated than national civil servants. We’re high fliers, not burger flippers”.

As the Prime Minister has pointed out, one in every six of the Commission’s employees earns over €100,000 a year. The ordinary working people of this country have run out of patience with the attitude displayed by the Commission. The British public are ready to make sacrifices to put Britain back on its feet, but not to featherbed a self-styled elite and its agenda. We are not rolling back wasteful public spending in this country only to see it re-imposed from Brussels.

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[Chris Bryant]

Is not the truth of the matter that literally the only way in which we can ensure that we end up with a less than inflationary increase is by not announcing that we will use the veto and by ensuring that we negotiate all the way through to the end? It is a child who announces on the first day of negotiations that they are going to use the veto, because then the Commission gets its way.

[Chris Leslie]

My hon. Friend is entirely right, and that is why the Government do not get it. They need a negotiating strategy to get the best deal for the taxpayer. [Interruption.] The Minister laughs, and the Chancellor is next to him puppeting him along in his hilarity, but I say to the Chancellor that this is an incredibly serious issue. It is about taxpayers’ money, and incredibly large sums of it at that. [Interruption.]

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[Chris Bryant (Rhondda) (Lab)]

This debate comes at a very particular time in the economic situation in Europe. The debate on this multiannual round did not start a week or a year ago; it started three or four years ago, and it is vital that we give a clear message to the European Union, the Commission and the other member states that, however ludicrously pro-European we might be—as is the case with me—we do not believe that the European Union and the Commission should spend more money at a time when every member state is having to make cuts.

[Jonathan Edwards]

Will the hon. Gentleman give way?

[Chris Bryant]

If the hon. Gentleman will forgive me, I will not. A lot of people want to take part in the debate. Perhaps he will catch Mr Speaker’s eye later.

Mr Barroso, in his introduction to the original version of the Commission’s suggestions, said:

“The European budget is the instrument for investment in Europe and growth in Europe.”

That is arrogance of the highest degree. It might be one instrument—a tiny part of the equation that is trying to refocus Europe towards a more competitive economy that is able to fight for jobs and added value against countries such as Russia, China and Mexico—but the biggest instruments must surely be the member states, or even the nations and regions within them. For instance, the factor that will make a difference to the resolution of Spain’s problems will almost certainly be the economic future of Catalunya and whether it invests in IT and future industries. It will not be the EU budget.

I am also convinced that, whatever happens to the EU budget, it will not make a dramatic difference to solving the problems in Greece or in Spain. The issues in those two countries are completely different. In Spain, for instance, the sub-prime mortgage market and the way in which houses were constructed along the coast, often for the British ex-pat market, is the single biggest problem that is dragging down the Spanish economy. So I say to Mr Barroso that, although I am ardently pro-European and I believe that the European Union has been one of the great political success stories of the past 100 years, I do not believe that the EU budget is the way to resolve the problems of those countries.

Government Members have been talking today about the small-ticket items in the EU’s expenditure. The Financial Secretary to the Treasury held rather different views from those he holds today when he was a member of the Social Democratic party. When I was a member of the Conservative party, I held exactly the same views on Europe as those I hold today. The sadness is that the Conservative party has abandoned its past.

[Greg Clark]

May I again correct the faulty recollection of the hon. Gentleman? The reason that I was a member of the David Owen branch of the SDP, rather than the one that went off in a different direction, was precisely because of its position on Europe, and I held the same views then as I do now.

[Chris Bryant]

As you know, Mr Speaker, I love apologising to Government Members, and I apologise to the Minister. The point I am making is a serious one, however. He referred to some of the small-ticket items in the EU budget, but the big-ticket item is the common agricultural policy. If we do not address that issue in this next round, we will manifestly have failed to deal with the gaping moral and ethical hole at the centre of the European Union.

[Andrea Leadsom]

rose—

[Sir Tony Baldry (Banbury) (Con)]

rose—

[Chris Bryant]

I do not want to give way to lots of people, as that would steal away time from others, but I can never resist the hon. Member for West Worcestershire (Harriett Baldwin).

[Harriett Baldwin]

On the subject of big-ticket items, will the hon. Gentleman confirm that, when he was Minister for Europe, the previous Government signed up to the euro bail-out mechanism? It was the present Government who had to negotiate us out of that mechanism.

[Chris Bryant]

The hon. Lady praises me far too much. I was Minister for Europe for about 2.5 seconds. In those 2.5 seconds, however, the one thing that I argued aggressively with my socialist friends and with my European People’s party friends—with whom her party used to be friends—was that the next multiannual round had to be lower than before and should not have an inflationary increase. I am afraid that the hon. Lady is pitching at the wrong person in this particular round.

I believe that there is a role for the EU budget and it should relate to growth, research and development. There are some things where we can do more together as a continent and add value. Unfortunately, however, those are not the issues that grab the attention of the French, the Germans, the Italians and the Spaniards. That is why we have to, and have always had to, build alliances with other countries, particularly the smaller countries.

[Andrea Leadsom]

rose—

[Chris Bryant]

I saw the hon. Lady attempting to intervene earlier. I will give way to her, but then no more.

[Andrea Leadsom]

I am grateful. Does the hon. Gentleman agree, then, that in order to be able to negotiate successfully on the big-ticket items as he says, we need a sound basis on which to go forward? Supporting an amendment that would simply trash all negotiations with other EU members, such as calling for a cut that is nigh on impossible, would not be the way to progress any decent negotiation on structural reform in the future.

[Chris Bryant]

To be honest, I do not agree with the hon. Lady. If I take her back to the last debate I had with her on this issue, I do not think that that is the position she was advocating then. In her heart of hearts, she would prefer Parliament to give a strong single voice today, so that the Government have a negotiating position whereby they can go to Brussels, Strasbourg or wherever and say, “Look, we have the whole of Parliament behind us saying, ‘We’ve got to cut’.” That is why I hope she will vote for the amendment today.

I know that some hon. Members do not like structural funds at all—perhaps this was the issue that the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who has already left the Chamber, wanted to raise—but I believe structural funds have a role to play in trying to make the whole European Union far more competitive in the world economy. That is certainly true for places like the valleys in south Wales. Sometimes the money is not particularly well spent, but if we did not have structural funds and cohesion funds, the danger is that each individual country would end up abusing state aid to protect specific businesses in their own country, thereby undermining countries like our own that choose not to go down that route.

I ask Government Members this: how could we possibly go back to our constituents and say to teachers, fire officers, police officers and all the rest, “We want to give more money to the European Union, but you’ve got to live with a pay freeze, and you’ve got to live with less money, with 19% cuts year on year to local authority funding for the building of hospitals, homes and so forth.”? I just do not see how I could possibly argue that.

[Ben Gummer (Ipswich) (Con)]

rose—

[Chris Bryant]

I am not giving way, as I know that many other Members want to speak.

I resent the Minister’s answer to my earlier question, as I think he simply misunderstood it. When the Government increased VAT in this country to 20%, it increased the amount of money we would have to pay to—[Interruption.] The Minister has probably been inspired by officials at this point, so he may know the answer.

[Greg Clark]

I am surprised that the hon. Gentleman, as a former Minister for Europe, did not know the answer—that the tax base is notional, so the levies of VAT make no difference whatever. It is irrelevant.

[Chris Bryant]

I will explain it all to the Minister later; he is wrong.

There are some specific savings that the EU could and should make. One relates to the ludicrous caravanserai between Brussels and Strasbourg. I merely point out to Conservative Members that it was John Major who negotiated that final agreement in the treaty of Amsterdam; I wish we were able to dismantle it. It costs us £180 million a year, and it is a complete and utter waste of time and money. Similarly, we have to tackle the common agricultural policy.

My final point for Conservative Members is this. If they choose to start their negotiating position first by saying that the veto is going to be used, and secondly by saying that there is a long shopping list of things that they want the EU to deliver—the new Margaret Thatcher, the hon. Member for South Northamptonshire (Andrea Leadsom), has often referred to a shopping list—the danger is that when they get to the till, they will have to say how they are going to pay. If they have already said that they want to get out of justice and home affairs policy and all sorts of other European Union policies, they will not have a negotiating leg to stand on. If they have already declared that they are going to use the veto, they will end up with a worse, rather than a better position for the United Kingdom and will be paying more money. That is why I, as a good pro-European, will be supporting the amendment.

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[Mr Bone]

I agree entirely.

The issue tonight is not whether I am happy to vote with the hon. Member for Rhondda—

[Chris Bryant]

You always are.

[Mr Bone]

There are no two people in the House who disagree more on the European Union than the hon. Gentleman and I. Today, however, we are voting for what the British people want. When I talk to people in Rushden or Wellingborough, they cannot understand why their council services are being cut at the same time as we plan to spend billions more on the European Union.

Cutting away the rest of the rhetoric, hon. Members must decide whether they will vote for a Conservative amendment calling for a real reduction in the budget, or a coalition motion that effectively calls for an increase, because it allows for inflation. I am sure that, secretly, the Prime Minister would like the whole House to vote for the Conservative amendment, because it would strengthen his hand in the negotiations enormously if he could say, “There is a united House of Commons demanding a reduction in the budget.”