European Union (Finance) Bill

Debate between David Gauke and Oliver Dowden

Tuesday 23rd June 2015 Commons Chamber

[Mr Gauke]

First, I acknowledge the consistency with which the hon. Gentleman has approached these issues. If I recall correctly our debates in 2008 and 2009, he expressed clearly his dissatisfaction with the performance of the Government that he supported, in terms of surrendering part of the rebate.

The other point to make is that the hon. Gentleman should not underestimate the Prime Minister’s achievement in that negotiation. When he went to debate and negotiate on these matters, few believed that he would be able to reduce the overall budget in real terms, but he succeeded in doing so. Today’s debate is focused not so much on the expenditure side, although I think we will discuss expenditure thanks to the Opposition’s helpful amendment and new clauses—I was going to say “probing amendments”, but we shall see—but what happened was also very important on the revenue side. It was a considerable success that we were able to resist new types of member states’ contributions, new EU-wide taxes and attempts to reform the rebate. That is of some note.

[Oliver Dowden (Hertsmere) (Con)]

Will the Minister give way?

[Mr Gauke]

I will touch on the smaller changes to the own resources decision in a moment, but first it gives me great pleasure to give way to a fellow Hertfordshire Member of Parliament.

[Oliver Dowden]

I congratulate the Government on their success in keeping the EU budget down. Will the Minister confirm that the Government will continue to keep pressure on the EU to make sure that it continues to live within its means, not just for this budget settlement but for future budget settlements?

[Mr Gauke]

I will certainly make that assurance and indeed, I will set out in a little detail what we are doing in that field. I referred to my hon. Friend as a fellow Hertfordshire MP. However, if I remember correctly, at the time of the negotiation, he was part of the team in Downing Street who were involved in the undoubted success. It is characteristic of his modesty that he did not draw attention to that point, but I daresay that a lot of the credit for the successful negotiation lies in his hands.

Smaller changes to the own resources decision affect some member states’ contributions and the balance between the pillars of the own resources system. Those are somewhat detailed, but I hope it will be helpful to set them out for the Committee, because they are, in essence, at the heart of the Bill and clauses we are debating.

Specifically, the smaller changes include the following: the member states’ retention rate for traditional own resources—TOR—which covers member states’ collection costs for customs duties, is reduced from 25% to 20%. That change will have no impact on the ultimate cost of the EU budget to the UK on account of the UK rebate. For the period 2014 to 2020, the ORD also reintroduces the reduced rate of call for VAT-based contributions for Germany, the Netherlands and Sweden. Austria will revert from its reduced call rate over the 2007-2013 multi-annual financial framework to a standard call rate of 0.3% over the 2014-2020 MFF. The financial benefit of the changes to the UK depends on technical factors. Even so, on current estimates, those changes point to a benefit of approximately £150 million over the course of the MFF.