European Union (Amendment) Bill

I apologise to the noble Lord, Lord Grenfell, who may want to intervene now. If he does, I will give way, but if it is convenient I shall carry on. I think we should all be very grateful that in this brief debate—I am sure we hope that it will be brief, because there are plenty of other amendments to follow—we have had the great benefit of having in this Chamber two of the key experts on budgetary matters in the form of the noble Lords, Lord Williamson and Lord Kinnock. I am personally extremely grateful, as I am sure these Benches will be. I thank the noble Lord, Lord Kinnock, for his remarks, which to some extent reiterated some of the comments of the noble Lord, Lord Williamson, but they also put a modern gloss on the matters that we will see in the new budget mechanism in the future if all works out well. What surprised me about the rather masterly analysis of the noble Lord, Lord Hunt, which I think we all enjoyed, was that it sounded like an explanation of the budget of several years ago—particularly the CAP components and so on, and the distinction between compulsory and non-compulsory expenditure. He is right to say that the system will persist for a few more years before the changes come about but it sounded like living in the past. I apologise for repeating a point that was made last week by me and perhaps by others but this issue comes back to the nature of the origin of the amendment, which I think was Amendment No. 89 on page 563 of the House of Commons Marshalled List, probably of 3 February, if my memory of the numbers and date is correct. However, on that occasion, it was put forward not by Mr William Cash and Mr David Heathcoat-Amory but by Mr William Cash and Mr John Redwood. Presumably, in anticipation that the noble Lord, Lord Hunt, would be introducing this amendment today, the media sources in Vulcan—they have prescience and foresight there, which we do not yet have electronically in Great Britain or our universe—have been sending him the explanation of the budgetary system which will be replaced. I strongly agree with the assertion of the noble Lord, Lord Kinnock, that there is no way in which the belief of the noble Lord, Lord Hunt, that the budget will automatically grow too big beyond the existing level can be proven just by the change in this mechanism. I regret very much that a person who has honourably described himself as a European enthusiast—I accept his explanation—would seek to put a spanner in the works with this amendment. That is why I hope that it will not be pressed and that he will withdraw it at the end of this debate. It is a spanner in the works of a modernisation of the budgetary system which has been extensively worked on, fought for and struggled for over recent years both by Members of the European Parliament and—strangely, because it may seem as though there is a conflict of interests—by members of the Council of Ministers of the various member states. They see the need for modernisation and for the abolition of the distinction between compulsory and non-compulsory expenditure. This European budget remains a minuscule proportion of the total public, central government and other expenditure in all the member states. It is of the order of 1.5 per cent of total public spending, as was mentioned by the noble Lord, Lord Williamson. That is a tiny proportion. It remains a virtuous system in the sense that its receipts automatically equal its payments. That is particularly the case given that the UK now has an uncomfortably large budget deficit—the Conservative Benches in the Commons suggest that historically it is one of the biggest deficits ever. How many member states will be in that position? The answer is: not many. A while back, that was regarded as a virtue for member Governments—or individual national Governments before the European Community was created. Bringing in the European Parliament must surely be seen as sensible by noble Lords on the Conservative Benches, including the noble Lord, Lord Forsyth, and others, who earlier lamented the lack of a sufficient democracy within the European Union. That is precisely why this mechanism is being modernised under the proposals of the treaty. Therefore, it seems a shame that, once again, the Conservatives are not bringing us all up to date on what the Conservative Party in the Lords really feels about the European Union, our membership of it and this Lisbon treaty. It is a modest modernising treaty if ever I saw one—it is totally different from the old constitutional proposals—and the budget is a good example of that. The Conservatives are stuck in a groove, reflecting the other place, with the much deeper hostility towards Europe that is always encountered there. Subject to further arguments in this debate, surely we must back the Government in the proposal to support new Article 9A in the Lisbon treaty in order to bring about greater involvement by the European Parliament. The need for a health check for the CAP would coincide with that process. That would be mainly a Council of Ministers function and the European Parliament would react to it rather than being a prime mover. That is right because this will be a decision between sovereign member Governments. Personally, I do not believe that the French Government will be as difficult as some of the British newspapers suggest. They see the reality of the changes in the agricultural world, even in France. No one can criticise France, where the agricultural population has now fallen to 3 per cent; after the war, it was traditionally 25 per cent but many farms in France have closed down. The French see the logic of the modern system of the single farm payment, providing for the resuscitation of the environment and all sorts of other activities linked to farming. The end to production subsidies will come about quite soon—over the next few years—and, instead, there will be support for environmental and agricultural modernisation and investment. That must be the way forward. The elected representatives of the European Parliament, as well as the national MPs of all the national parliaments, will work together to achieve that objective. They will work with the Governments rather than follow the old-fashioned system that the noble Lord, Lord Hunt, seems to think should carry on for ever.