European Communities (Finance) Bill

Interestingly, on that last point, in fact I was not; I am happy to put that on the record today. I say to my hon. Friend that I am just making a positive case for Europe and for our engagement in it. Opposition Members might think that someone such as me might be defensive on these matters, but that is not the case at all. I have come to the Chamber today to say that the deal was not perfect in every respect but it serves our interests and moves us forward, and it moves the EU forward. I am quite happy and comfortable to be standing at the Dispatch Box making that case. There are wider economic benefits. Migration from central and eastern Europe is much discussed and I recognise the challenges it poses to some of our communities, but there are indisputable benefits to British business and the British economy. A8 migration contributed about £6 billion a year to the British economy between autumn 2001 and the middle of last year, and those workers from central and eastern Europe who have come to Britain taking advantage of the free movement of labour are likely to make a stronger net contribution to public finances. The Bank of England reported last year that overseas workers have played a significant role in boosting the pool of available labour and helping to ease labour shortages. Britain is experiencing direct and immediate benefits in increased trade, extra jobs and the benefits of migration from enlargement—a process that the December 2005 agreement consolidates. Britain has also benefited, and will continue to do so, from structural and cohesion funding. Between 2000 and 2006, the UK received about €15 billion of those funds, going to projects that benefit constituencies in all parts of the country. That has contributed to the economic development of some of our poorest regions. Merseyside alone has received more than £300 million of European social fund investment, and Cornwall has also received a significant sum—the hon. Member for Falmouth and Camborne mentioned that. UK regions that still need funding will continue to receive it—to answer a point made by the hon. Member for Stone, who has now left his place—but as areas such as Merseyside grow stronger it is right that the focus switches to the poorest EU regions, particularly the new member states. Before I conclude, may I turn to the budget review and the future of Europe? The figures I have been quoting this afternoon support the case that we need to be even more hard-headed in prioritising funding towards the future challenges that Europe faces collectively, if it is to secure value for money. As well as the benefits I have already outlined, we have secured a frank and honest process of challenge and review of the EU budget to ensure that Europe is helping to equip itself to face the challenges of the future. As the Prime Minister and the Foreign Secretary set out in the recent ““Global Europe”” pamphlet, the EU has spent too long focused on institutional questions. Europe needs to move on from that debate and focus on the issues that matter to its citizens: competitiveness; jobs; migration; the environment; and security. It needs to meet the challenges of globalisation and play its full part in the wider world, and to do that, its budget needs reform. Some change has been made, as I said to my hon. Friend the Member for Wolverhampton, South-West (Rob Marris), but he is correct in saying that too much expenditure—40 per cent.—still goes on the common agricultural policy, and more than 50 per cent. of economic investment spending continues to go to the richer member states. Without reform, the EU cannot meet its future challenges and we will not see the global Europe that we need. So it is clearly in Britain's interest—and in Europe's—that the budget is reformed. The fact that the agreement that this Bill implements provides for a review of the budget, including the CAP, is the third reason why the Bill will implement a good agreement for Britain. As part of the budget review, the Government will work with their partners to make the case for a reorientation of the budget towards areas such as innovation, tackling climate change, international development and migration. That does not mean any lessening of our commitment to budget discipline—far from it—and spending resources effectively will remain at the heart of our approach. The hon. Member for Shipley (Philip Davies) enticed me earlier into talking about the European Court of Auditors' report, and I told him plainly that much more progress must be made in this area. In addition to the measures that we have championed over recent years, such as the establishment of the European Anti-Fraud Office, former Commissioner Kinnock's work on Commission reform, the shift to activity-based budgeting and accruals accounting, and the Commission's 2006 action plan following the UK presidency's work, we will go further. We have made proposals for increased national parliamentary scrutiny of EU funds through the publication of an annual consolidated statement of EU expenditure, prepared to international accounting standards and audited by the National Audit Office.