European Union (Amendment) Bill

Over 20 years ago, I was the commissioner in charge of the budget. Of course, much has changed in the mean time and my recollections are, no doubt, out of date. However, I would like to cover some of the same ground as the noble Lords, Lord Hannay and Lord Williamson, both of whom I had the pleasure of working with when I was a commissioner. They were then British civil servants. First, I agree very much with the point made by the noble Lord, Lord Hannay, about what my noble friend Lord Hunt called the nuclear option. It is far from that; the budget was indeed rejected one year when I was the budget commissioner and everything went along smoothly thereafter on the one-twelfth system—a very effective way of curbing public expenditure. I am not suggesting that it should be used very often but, far from laying waste to the budget, it enables controls to be exerted. I agree with the point made by the noble Lord, Lord Williamson, that the European budget should be seen not in isolation but as a part of the totality of public expenditure within the European Union—as part of the totality of what is spent at the Union level and what is spent at the national level. In my opinion and the opinion of many noble Lords, rather more is still spent on agriculture than is justifiable but, as the noble Lord, Lord Williamson, said, we are talking about something like 1 per cent, which helps to put it into context. I do not agree with the noble Lord, Lord Pearson of Rannoch—I rarely do on these occasions—that because we point out that the European budget is only a very small proportion of European public expenditure, those of us who support the European Union feel that it somehow does not matter. Of course the budget should be subjected to exactly the same disciplines and constraints as public expenditure at the national level or at the local level. No one in his or her right mind—I am sure that the Minister will agree on this point—would suggest that you should exert discipline on public expenditure at one level but not at another level. It is quite absurd of the noble Lord to suggest otherwise. My penultimate point is that, rather than being about a larger or smaller European budget, the argument ideally should concentrate on whether expenditure can be most effectively made at the European level or at the national level. It is not a case of saying a big European budget is good or bad; it is a case of saying at what level—European, national, local or whatever it may be—expenditure can most effectively be made in the public interest. The burden of proof in those circumstances should almost always be on those who wish to transfer expenditure from the national to the European. I do not think that a large budget is a sign necessarily of a vigorous European Union. The European Union is about many things other than the budget and many of them are more important to the life of the European Union than the budget. In my view, the burden of proof should in general be on those who wish to transfer expenditure from the national to the European level. For that reason, I support a cap on the proportion of public expenditure that can be spent at the European level. I am in favour of a cap partly because I do not share the confidence that some others have in the European Parliament. Where you have an elected assembly—whether it is the European Parliament on the one hand or the Scottish Parliament on the other, to take two examples—that has the power to vote expenditure but is not responsible for voting the taxes that go to fund that expenditure, you tend to get the members of those assemblies generally in favour of spending. It is always nice to be in favour of spending and it is always less pleasant to be in favour of higher taxes. My own experience of the European Parliament—now a very long time ago—was that, in general, there was always a majority for spending more. If the European Parliament is to exert the kind of discipline on the budget that we wish to see, it needs to be within the context of a cap so that more on one lot of things will mean less on another lot of things rather than more on everything. The lessons of the European Parliament in relation to public expenditure might very well be applied in dealing with the Scottish Parliament.