European Union (Amendment) Bill

I was intrigued by the repeated references of the noble Lord, Lord Hunt, to the prospect of what he called a bigger budget for the European Union as a consequence of the changes being produced in the Lisbon treaty. I can certainly understand why he makes the detailed arguments but I cannot follow him in that particular argument. I should just like to pursue it for a moment. At present, as the noble Lord, Lord Williamson, highlighted on the basis of his very great experience, the European Union budget is around about 2 per cent of total public expenditure of the member states of the European Union. Sometimes it is a little less than 2 per cent, sometimes it is a little more, and it has been thus for decades. That budget is also equivalent—or has been for most of the past several decades—to about 1.15 per cent of the total gross national product of all the member states. It is actually slightly lower than that now as a consequence of the last budgetary exercise undertaken by the Council in 2004 and concluded under the British presidency. Eighty-five per cent of the budget—again a decades-old figure which is still valid—is spent in the member states. Indeed, most of it never leaves the member states and is obviously a book transaction in any case. That is entirely how it should be. The fact of the matter is that in the reform treaty, despite the alterations to which the noble Lord, Lord Hunt, drew attention in decisions about the allocation of the budget, the total of the budget remains in the hands of the member states in the Council. There is no power on earth—other than by the decision of those member states in the Council—that can produce an increase in the total of the budget. I find it very interesting that within that total there will be a new dynamic that involves the Parliament in decisions relating to so-called compulsory expenditure, which, as the noble Lord, Lord Hunt, said, is overwhelmingly the common agricultural policy. Having discussed these matters with European parliamentarians and Westminster parliamentarians for many years, I take the view, as the noble Lord, Lord Williamson, does, that the CAP budget will be a great deal more liable to amendment, reduction and re-orientation, because of the introduction of authority from the elected Parliament, than previously, despite the reforms that have taken place, when it has been the sole property of the Council and the agriculture ministers. Part of the impetus in the Parliament to make changes in the CAP and the common agricultural fund will come from the fact that it shares the view—it is certainly a majority view in this House and in comparable Parliaments elsewhere in the European Union—that too great a proportion of the total budget is still going to particular forms of agriculture support. That will produce a pressure on the CAP. Secondly, there are, as the noble Lord, Lord Hunt, rightly said, other ambitions for different priorities within the Parliament. There is a strong view—this has been the case for several years—that Community expenditure on research and development, consistent with the ambitions of the Lisbon strategy of 2000, should be much bigger. The budgetary exercise in 2004 cut to €19 billion the proposed €31 billion budget over the seven years of the current budgetary period proposed by the Commission. I did not think that that was a sensible direction in which to move in circumstances in which we are repeatedly told that the greatest source of effective competitiveness in the globalised economy is knowledge, scientific and technological prowess, and innovation. I simply think that that is worth investing in. The will of the Council, rightly representative of the elected governments, prevailed and democratically that is how it should be, however much I regretted the outcome. In the Parliament, that kind of ambition will be reflected. There will be an ambition to strengthen the commitment in the European budget to emergency aid, but, more particularly, to systematic long-term support for development in the Third World. There will be arguments over that too. I do not anticipate a huge increase in that area, but it certainly will be an alternative presented against the current level of agriculture spending as a proportion of the budget. Those tensions are healthy, democratic tensions. Those pressures are democratic pressures that really do reflect the changing priorities of modern Europe, including this country. I do not think there would be anything remotely like majority support for maintaining even the level of spending as a proportion of budget that has been reduced, that still goes on the common agricultural policy. It is to the credit of the member states and the Commission that, in the years since the mid 1980s, the proportion taken by the CAP has gone from about 70 per cent, then down to just over 50 per cent and is now about 40 per cent and should not just be lower, but should be allocated in a different way. There would be a stronger mandate even for spending 40 per cent of the budget on agriculture, broadly defined, if a larger proportion of that 40 per cent was going to rural development so that communities were provided with alternatives and attractions to encourage young people to stay in the rural areas. I do not think there would be a terrific argument about that. However, that, too, is one of the arguments that will now be heard in consideration of the European Union budget to the degree that it was not heard outside the Commission or in the Council in past years. I think that we are observing a healthy development in two respects. First, no change is implied in the total of the European Union budget, because I foresee no substantial change of will in the member states to bring about an increase in the total—certainly not one of any significance. Secondly, there will be a new source of argument about the priorities to be pursued with the money available in the European Union budget over a budgetary period. As the noble Lord, Lord Williamson, said, it will deprive the agriculture Ministers, with particular constituencies and priorities to serve over the decades, of a monopoly in conclusive decision-making on the way in which the budget for agriculture is spent. That budget still takes up a substantial part of the budget of the European Union. Legitimate though his arguments are in a parliamentary context, I hope that in the detail the noble Lord, Lord Hunt, will seek an opportunity to withdraw the claim that the consequence of the changes in the Lisbon treaty will be that the budget will be bigger. That will not be the case. Indeed, I believe that the changes will bring about a better, more accountable and more democratic form of decision-making because it will be a new method of shared decision-making between elected parliamentarians and elected Governments. That will be an advance for the European Union and the people who pay for it—the taxpayers.