European Union (Finance) Bill

Kelvin Hopkins Excerpts

Tuesday 23rd June 2015 Commons Chamber

[Mr Gauke]

Absolutely. I am keen to make that commitment and I am grateful to my hon. Friend for making that point. Those of us who participated in the equivalent debates after the previous multi-annual financial framework was agreed and on the Act that performed the task that this Bill will now perform will recall that we spent some considerable time focusing on the fact that a large part of the rebate had been surrendered by the previous Government for little or nothing, merely a promise of reform of the common agricultural policy that had not been delivered.

[Kelvin Hopkins (Luton North) (Lab)]

rose—

[Mr Gauke]

I will give way to the hon. Gentleman, because I believe that he participated in that debate.

[Kelvin Hopkins]

Following on from the point made by the hon. Member for North Dorset (Simon Hoare), I have said many times in this House that the deal done in 2005 was a terrible mistake. The Government have made frequent references to it. Is it not now appropriate to consider trying to regain what was lost in that deal, particularly because our net budget contributions have been rising so strongly in recent years?

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[Mr Gauke]

My hon. Friend makes an important point. I would perhaps go further: it is not just member states that recognise that things need to change and that there needs to be better value for money. Vice-President Georgieva, who has responsibility for the budget, also recognises the need to ensure that money is spent in a better way. The Prime Minister has consistently set out the fact that there are two sensible objectives: to cut the whole budget and to protect the rebate. We will continue to make that case.

[Kelvin Hopkins]

I thank the Minister for giving way once again. The hon. Member for Boston and Skegness (Matt Warman), who is not in his place, made a useful point about expressing our contributions in terms that the citizens will understand—contribution per head, per month or whatever. Would it not be useful to look at the expenditure side of, for instance, the common agricultural policy, and say how much that costs in net terms per head of population, and how much it has cost over many decades in higher food prices? People would be very interested to know that.

[Mr Gauke]

The hon. Gentleman draws me into deeper waters and wider issues. Perhaps I should resist, Mr Streeter, before you advise me not to spend too much time on the common agricultural policy and some of its costs. It is worth pointing out that the CAP as a proportion of expenditure by the EU is falling and has fallen fairly significantly. The hon. Gentleman’s point is about making things clearer and ensuring that the British public have a better understanding of where their money is spent. There is a wider point, because that does not apply only to EU contributions. I am sure that he and all hon. Members welcome the fact that Her Majesty’s Revenue and Customs sends out tax statements to the British public so that they can see details of where money is spent in various Government Departments and the details of the money spent on our net contribution to the EU.

The scrutiny Committees of both Houses closely scrutinised and cleared the proposal for the new ORD, which was agreed unanimously by member states in May 2014. The Bill and the Prime Minister’s 2013 deal demonstrate that, working with allies, we can achieve change in Europe, and secure a good deal for the UK and for Europe. I commend the clauses to the House. They should stand part of the Bill.

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[Mr Gauke]

I take my hon. Friend’s point. We are, I hope, moving in the right direction. The new Commission has been in place for the past few months or so, and the early signs are—I shall return to the point—that it appears to be more focused on the task. I think there is a link: there was a reduction in the EU budget, which has somewhat focused the mind.

[Kelvin Hopkins]

Following what the hon. Member for Torbay (Kevin Foster) has said, would it not be sensible and appropriate for our Government to carry out a comprehensive review of how we think the budget should operate, and make that a firm public submission, whatever is undertaken by the EU itself?

[Mr Gauke]

I am grateful for the hon. Gentleman’s intervention, which he makes in a characteristically constructive way. Clearly, it is important for us to work with other like-minded member states to ensure that we get the focus we need and the prioritisation of expenditure in the areas that add the most value. There are different ways of achieving that, and we can discuss that. It is only fair to note, however, that some progress has been made, as I shall touch on in a few moments.

New clause 2 imposes a requirement on the Government to request a review by the Council of Ministers of the EU

“budget priorities, waste and inefficiency”

in advance of ratification. The new clause relates not to financing, but to expenditure, so I again point out that we will reject it. Although the Government recognise the need to cut down on wasteful spending, requiring the Government to write and ask for a review of waste and inefficiency would add little to what the Government are already doing in this area. We know that there is waste and inefficiency in the EU budget. We need action, not words—and action is what the Government have taken. Our most important step has been to cut the EU budget. Just as Governments across Europe are making tough decisions to consolidate public finances, the multi-annual financial framework deal negotiated by the Prime Minister has forced the EU to make tough decisions to bear down on waste and to economise. By imposing restraint on the EU budget, we can create a culture change in the Commission. The days of Commission officials measuring their success by how much of the budget they have been able to spend should be behind us.

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[Tom Tugendhat]

Would the hon. Lady let me know which of her hon. Friends are so supportive of her? There appears to be somewhat of a dearth of support.

[Kelvin Hopkins]

Will my hon. Friend give way?

[Barbara Keeley]

I will.

[Kelvin Hopkins]

I rise to assure my hon. Friend that I am supporting her very strongly today.

[Barbara Keeley]

I think the hon. Gentleman will see when we come to the vote that we do have support.

Our new clause 3 would also improve accountability and transparency by inviting EU budget representatives to appear before the European Scrutiny Committees in this House and the other place each year before the EU budgets are negotiated. I appreciate the points made by Conservative Members that of course there should be no interference with the work of the European Scrutiny Committee in this House, but what we have tried to do in these new clauses is send the strongest statement we can send and give the strongest possible support to all those in this House who want to see these important aspects of value for money and budgetary control put in place.

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[Kelvin Hopkins]

My hon. Friend is making a fair point. It has been suggested that, in real terms, we should be paying 7% less into the European Union budget by—I think—2020. Given what she has just said, is it not likely that that will not turn out to be true, and we will not see a reduction of that kind?

[Barbara Keeley]

Indeed, that is a very real fear. If we look down the list of commitments and compare it with the payments made, we will see the level of commitments that are still to roll forward, which is a very frightening prospect. I go back to the point that I have just made. This is a system designed to drive up budgets. We support what has taken place and recognise that the House voted for it back in 2012, but unless this system changes we will be in a situation in which commitments are being made in the period up to 2020 of €960 billion, which is €52 billion more. It is a serious matter. Clearly, it is serious if the Commission is taking on budgets and then not paying bills, but it is the upward pressure on the budget process that is the great concern.

In our last debate on this Bill, the hon. Members for Corby (Tom Pursglove), for North East Somerset (Mr Rees-Mogg), and for Daventry (Chris Heaton-Harris) and my hon. Friend the Member for Luton North (Kelvin Hopkins) referred to a range of concerns that their constituents had about EU finance, how the EU budget is spent and the need for control of the budget. That is a point to which we will keep returning.

In the debate of 15 January 2008 on the Committee stage of the European Communities (Finance) Bill—I have already mentioned this—the Financial Secretary, then shadow Treasury Minister, and his shadow Treasury colleagues called for a report on “all aspects of EU spending”. Clearly, both the Opposition then and the current Opposition have had concerns about this. The Minister and his colleagues called for that report in 2008. I hope that we still have time in the rest of this debate for him to repent his view that we do not need further reviews.

As I have mentioned, there were complications in the wording of the amendment in 2008. I have read through the debate. The difficulty that the hon. Gentleman and his hon. Friends on the shadow Treasury team at that time ran into was that the amendment called for Treasury certification that it

“considers the outcome of the review is satisfactory to the interests of the United Kingdom”.

That seemed to be the sticking point. We have avoided such complications in this Bill by tabling simpler amendments that ask for an analysis of the basis used for appropriations and the study of alternative arrangements.

The Minister has said that such a review is ongoing. Will he tell me at this point when we will see that review?

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[Barbara Keeley]

I am not making that point in particular. What we are asking for in this clause is a review of budget priorities. We can see from the percentages that competitiveness for jobs and growth is the most important. I am not making specific points about specific countries. Under the new method of agricultural spending, I think that there is a great deal of flexibility for allocating the funding between countries.

[Kelvin Hopkins]

My hon. Friend made a very strong point about the CAP. If there were no CAP, would it not be sensible for us to subsidise sections of our own agriculture according to what we think is right rather than what the European Union thinks is right?

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[Mr Rees-Mogg]

There are great advantages to having small, family owned farms, but we need an efficient agricultural system that provides the food and produce the country needs. I do not think one should be unduly sentimental for agriculture against other industries. As a lover of the countryside and of our rural traditions, I am tempted to fall in line with the hon. Member for Glenrothes (Peter Grant). The constituency was called Central Fife when I stood there—unsuccessfully, just for the record. However, although I am sympathetic to his point, I think it is important to have efficient agriculture first when spending other hard-pressed taxpayers’ money. It ought not to be entirely about sentimentality.

[Kelvin Hopkins]

It is a great pleasure to follow the hon. Member for North East Somerset (Mr Rees-Mogg). Before I turn to the main part of the my speech, I would like to comment on what he has just said. Some 34 years ago, my then 11-year-old son had a discussion at his primary school about what was then called the Common Market. He was asked about the common agricultural policy, which he knew a lot about because he listened to me at home. His teacher asked him, “What is the CAP?” He said, “It’s the common agricultural policy.” His teacher asked, “What is that about, then, Daniel?” He said, “It’s a way of subsidising inefficient small farms,” and 34 years on, the hon. Gentleman has raised exactly the same point. Some things do not change very much. I think my son is the same age as the hon. Gentleman.

It is also a great pleasure to follow my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), who sits on the Front Bench, and support two of her new clauses and her amendment. On new clause 3, I am pleased that she has acceded to the sensible point made by the hon. Member for Stone (Sir William Cash), the Chair of the European Scrutiny Committee, of which I am also a member. I will, however, support my hon. Friend in the Lobby later on her other new clauses.

I have spoken probably 100 times in European debates in this Chamber over the past 18 years. I have said some of what I am going to say today a number of times before, but in order to make an effect in politics I think we must sometimes repeat messages over and over again, hoping that, in time, one’s colleagues, particularly those on the Front Bench, will listen, agree, take note and act accordingly.

I was also much taken by the hon. Gentleman’s comment that when he rebelled he was trying to help his Front-Bench colleagues. That is a splendid idea. If ever I am moved to rebel in future, I shall tell my Whip that I am trying to help our Front-Bench colleagues and I hope she will accept it in that spirit.

The most interesting new clause is new clause 2, which is about expenditure. I have said many times that I believe that the common agricultural policy ought to be repatriated to member states for them to decide how to subsidise their own agriculture, and that the CAP’s structures should be dismantled. We would certainly benefit from that financially in more than one way, including by not paying in so much. We could subsidise at exactly the same level and possibly in exactly the same way, but still be better off because we would not be paying into something where we are net losers.

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[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I do not know whether the hon. Gentleman has ever been to Iceland, Norway, the Faroe Islands or places further north of Scotland, but he would see greater use of land there than in the highlands and islands of Scotland, because the agricultural support is so much better. On repatriation, would there not be a danger to some countries that the Anglo-Saxon or Anglo-American model of economics would suck out the little money that is there and give it to London, which does not put it around its own state? At least with Europe we have some sort of guarantee that we will get the money, even though we are among the least favoured areas of the land.

[Kelvin Hopkins]

The hon. Gentleman’s point tempts me to talk at greater length about a broader, more socialist approach to running the world, with which I strongly agree. If I did so, however, I think I would set too many hares running and Mr Williams would call me to order very quickly.

The CAP is nonsense. We ought to abolish it and repatriate agricultural policy to member states. We can decide in our own country which parts of agriculture should be subsidised and to what extent, and we can decide where and when we buy food. We might choose to subsidise to keep agriculture sustained in this country for strategic reasons. During the second world war we needed to produce food for ourselves, and all countries have to bear those sorts of factors in mind when deciding what they produce.

Interestingly, the right hon. Member for Gordon (Alex Salmond) obviously does not like the common agricultural policy or the common fisheries policy very much. I am surprised that the SNP is in favour of the European Union at all.

[Alex Salmond]

The hon. Gentleman is mistaken. I think that the CAP is a failure of UK Government negotiation, as I have tried to explain. On the CFP, however, he is on much stronger ground: I would support a treaty amendment to change it substantially and remove it from central control.

[Kelvin Hopkins]

We are in strong agreement on that point. I have said many times in this Chamber that we ought to give notice of withdrawal from the CFP if it is not abolished in total. Countries could then manage their own fisheries with a 200-mile or 50/50 limit. In that way, fish stocks could be recovered, because they would be managed at a national level and we would license fishing for our own fishermen. In addition, if any other fishing boats came from outside, they would have to be licensed and managed properly.

[Alex Salmond]

To pursue my point, is it not strange that the Government never mention treaty amendment to the common fisheries policy as an objective, even though it would certainly be within the competence of this financial Bill? Everything else is mentioned as an objective in the renegotiation, but to my knowledge the Prime Minister has never identified the common fisheries policy as something that he is even trying to get change on, far less a treaty amendment.

[Kelvin Hopkins]

The right hon. Gentleman makes a strong point. That is one of my red lines, and I shall put that case to the Prime Minister when I have an opportunity. I have said that many times before in the Chamber.

[Jim Shannon]

As I said earlier, I represent the constituency of Strangford, and the fishing industry is particularly important to me. We have had a cod recovery programme in the Irish sea for the past 10 to 12 years, and there are greater numbers of cod than there have ever been during that time and the fish are bigger. However, Europe restricts our fishermen’s ability to fish those cod. That is an example of why we need a new common fisheries policy that local people can control and have an input in.

[The Temporary Chair (Hywel Williams)]

Order. I hope that the hon. Member for Luton North (Kelvin Hopkins) will not go too far down that line of discussion.

[Kelvin Hopkins]

I shall move on to my other points in a second, Mr Williams, but I agree with the hon. Member for Strangford (Jim Shannon) that if member states control their own fisheries, they will be able to stop irresponsible fishing and the plundering of fish stocks by other nations.

[Sir Greg Knight (East Yorkshire) (Con)]

Going back to what the hon. Gentleman said a few moments ago about agriculture, is he aware that many farmers do not want to leave the EU because they feel they would be treated less generously? However, if Britain came out of the Union, would we as a net contributor not have more money to spend on farming if we wished to do so?

[Kelvin Hopkins]

The right hon. Gentleman makes a strong point. I have said that if we were outside the EU, we would be better off financially and could choose what we subsidised, how and to what extent. We could choose what sort of farming we wanted to sustain. I have made the point before that small hill farmers in Wales, who are part of our rural culture, ought to be preserved. They might not be very efficient, but we could perhaps choose to subsidise them. For other forms of farming we might choose to maintain the subsidies at the current level, but we would make that choice democratically through our Government and this Parliament.

[Mr MacNeil]

The glib answer that has often been given to me in the House in years past as to why we should maintain the common fisheries policy is that fish do not have passports. Of course that neglects the reality that there are three types of stocks: migratory stocks, non-migratory stocks and straddling stocks. We can look at what happens in countries that control their own fisheries, such as Iceland. Jóhann Sigurjónsson, the chief fishing scientist of Iceland, tells me that its fishing has so improved, and trawlers are catching the cod stocks so much more quickly, that fishermen are actually getting frustrated. They are being so successful and doing their work in so little time that they want to go and catch more. That is a sign of their success, having managed their own stocks for a number of decades.

[Kelvin Hopkins]

Indeed. The hon. Gentleman is well ahead of me in his expertise in the matter, but the basic point is that we should control our own fish stocks and manage them properly.

I have one or two other points to make about expenditure in the EU budget. From time to time we have discussed international aid. My view, and I think the view of the Department for International Development, is that we would spend international aid better than it is spent through the European Union. We would target and manage it better and try to ensure that it was spent in a less corrupt way in certain countries. Countries would do better to manage their own aid donations abroad than have them dealt with through the European Union. Aid is therefore another component of the EU budget that could be taken away.

Then we come to structural funds. Again, I believe that member states, particularly our own country, are best able to judge what regional assistance they need to provide. We could target that assistance better than when it is decided by the European Union. As part of our regional policy, we might want to have state aid to assist the growth of manufacturing in some of the less successful regions of our country. Manufacturing is too small as a proportion of our economy, and if we want to expand and improve our manufacturing sector to help investment, we might want to use state aid, which is forbidden under the EU arrangements.

[Mr MacNeil]

Is not the great danger that the high priest of the austerity cult, the Chancellor of the Exchequer, would drive austerity further and we would not see the spending that we currently see in areas of Wales and in the highlands and islands of Scotland?

[Mr MacNeil]

He would keep it all in London. If that were to happen, we would need full fiscal autonomy, or indeed independence, to ensure that areas of Scotland were well protected.

[Kelvin Hopkins]

I thank the hon. Gentleman, but it is a counsel of despair to say that because we cannot trust our own Government, we have to go to the European Union. I was on a march through London opposing austerity last Saturday, and there were tens of thousands of people there who felt strongly about it. Even though we may have Governments we do not like from time to time, we have the chance of pressurising them in the short term and getting rid of them and replacing them with more progressive Governments in the long term. Pressurising Governments is what I do in politics, as I think Members of all parties do. I want to see the Government elected in this country governing this country, not giving away our powers so that we are governed by a bureaucracy in Brussels or wherever.

I have mentioned spending on the CAP, aid, structural funds, regional policy and so on. If we had responsibility for those things, some of the fiscal transfers that effectively take place between the richer and poorer countries in the European Union might no longer happen. If we want fiscal transfers, the way to do it would be for us to make substantial contributions to a fund that could be allocated to the Governments of less well-off countries. Lithuania, Latvia, Poland or wherever could benefit from donations, but they would go to those countries’ Governments, who would decide how that money ought to be spent in their countries. It would not be about the European Union subsidising certain sectors in a way that may or may not be beneficial to those countries. As I said, in Lithuania, and no doubt in other countries, they are being paid not to grow agricultural products and their own food. That is nonsensical, and I wish to see an end to it. If we want fiscal transfers, let them be up front. Let us contribute to a fund that poorer countries in the EU, or in a new association of member states, could draw on. That would be a more sensible way forward.

Of course, that would loosen the bonds of the European Union. We would not have decisions about all sorts of sectors being made by the Commission in Brussels. They would be made by democratic Governments, and we would have a looser association of states within Europe, which would be a much more sensible way of operating. I support what my hon. Friend the Member for Worsley and Eccles South said, and I support her probing new clauses and her amendment 1, which we hope to be voting on soon.

[The Temporary Chair (Hywel Williams)]

I call Peter Grant.