They know less than they should

Lord Flight asked a very pertinent question in the House of Lords:

how many people are employed by the European Union institutions; and what assessment they have made of how many of those individuals pay either no tax or reduced tax rates on their remuneration.

Lord Wallace of Saltaire responded on behalf of HMG:

My Lords, the European Union institutions all together employ approximately 55,000 people. EU staff are exempt from national income tax, a similar situation to that found in other international bodies. As in other international bodies, the EU deducts a proportion of salary as a form of extranational taxation, proceeds from which are returned to the EU budget. This is applied progressively, rising from an initial 8% to a 45% marginal rate for the highest-paid. In addition, there is now a special or solidarity levy, which last month was increased from a top rate of 5.5% to 6%; most officials pay an average of 2%. I should declare an interest. My wife was for five years the director of the Robert Schuman Centre in Florence, whose staff regulations were those of the European institutions. We have examined her payslips and established that an average of 28% of her gross salary was deducted in community tax each month.

To the suggestion that civil servants who work for the EU should be taxed at the home rate back home he went into a long discourse about international organizations, residency and non-residency. The next topic raised, by Lord Tomlinson, was an old and tired one and shows that some of our politicos cannot or will not understand how the EU works.

Is the Minister as surprised as I am by the low number of European Union institution employees? How does that figure-I think he said 55,000-compare with a large-scale local authority in the United Kingdom?

The response was:

My Lords, the figures I have are that Paris employs 50,000 people and Birmingham employs 60,000 people, so it is a relatively modest number.

That merely proves that local authorities employ far too many people and some very severe pruning is needed. There is, also the point, rarely raised at times like this that those employees of local councils (and of many other organizations, public and private) spend much of their time implementing EU regulations. However, Lord Wallace went on:

I am sure the noble Lord will admit that the inefficiencies of the Commission-in particular, the rather inadequate personnel policies, the relatively generous allowances and an expatriate allowance which, unlike the NATO expatriate allowance, does not phase out after a number of years and is rather more generous-are things that we should be looking at, particularly when all national budgets within the European Union are being squeezed.

Uh-huh! Well, good luck with that. It would appear that quite a few people, not just the usual suspects are troubled by the expensive nature of the project. Lord Dobbs asked:Will my noble friend help a confused man who has trouble with numbers? We have one

European Union which has two parliaments, three presidents and dozens of employees who earn more than our Prime Minister. I understand that the second parliament in Strasbourg, over the course of the parliamentary cycle, costs our taxpayers €1.5 billion. Do any of those statistics make any sense to him?

Apparently, we all keep campaigning for abolishing the Strasbourg part of the merry-go-round but, so far, with no success whatsoever. That has something to do with the fact that the Strasbourg week was written into the Treaty of Amsterdam and has remained in the subsequent ones. Nobody noticed at the time and nobody is going to be able to change without re-writing the treaties.

That was the last moment of serious or semi-serious (can anything that involves the European Parliament be called serious?) discussion. The following two farcical exchanges took place:

Lord Pearson of Rannoch: My Lords, what is the average annual cost to the taxpayer of Members of your Lordships' House and what is the average annual cost to the taxpayer of Members of the European Parliament, including all the latter's special perks and allowances?

Lord Wallace of Saltaire: My Lords, it may surprise the noble Lord, but I do not have the exact figures to hand. Of course, any international parliament costs a great deal more because of the travel, dual residence and so on that are involved. Members of this House who also attend the Parliamentary Assembly of the Council of Europe or the NATO Assembly also cost rather more than the rest of us.

Lord Howell of Guildford: Does my noble friend have any figures on the European External Action Service? Has he noticed recent criticism that it is not performing very effectively? Does he have any measure of cost versus performance for that body?

Lord Wallace of Saltaire: My Lords, I do not have that. The European External Action Service is still very much in its early stages. It is now performing rather better than when it was originally established. Multinational operations take longer to get going than others-I am looking at various people here who have served in the European Commission-and have a level of built-in efficiency.

One cannot help longing for the days of Lord Bruce of Donington. After an exchange like this he would invariably rumble to his feet and ask whether the noble Minister was aware that he had the figures that the Minister apparently did not. Alas, who is there to replace the great Lord Bruce? Incidentally, he it was who demanded information about the nascent EU diplomatic service and the money that was spent on it, long before its existence was acknowledged.

Stick, end, wrong - Cameron

The Boy-King is all set to take on crony capitalism. Well, sort of. Because to take it on properly he would need to get rid of a great deal of legislation and regulation that he neither can nor will change. As the Wall Street Journal says in its trenchant article on the subject: A Phony War on Crony Capitalism:

Increased regulation of the market for corporate control, especially of these takeovers, has helped entrench mediocre managers who have been able to increase their own pay without suffering the consequences. For now, the main obstacles to throwing the corporate bums out are rules governing tender offers, limits on the quantity of shares that activist investors can accumulate before announcing a formal bid, and drawn-out regulatory approvals for consummating a takeover.

As we know, most of the regulation comes from the EU and is implemented here as a legal requirement. Does Mr Cameron know that? Hard to tell. What he does know is that knocking high salaries and strutting around as the supposed defender of the little man is good PR. The rest is of little consequence to him.

City AM, unusually, backs Cameron. Here is Allister Heath in yesterday's column noting approvingly that Cameron is right to back shareholders. Today, he is providing useful data about boards, cross-over, pay and cronyism. That approval of Cameron did not last long or not fully. Power to the shareholders is still seen as a very good idea.

Where does the money go?

Taking time out of the two big stories: Russia where they do not believe politicians and Britain's obsessive need to do so, I have returned to a question I have often asked myself and anyone who did not manage to move out of my vicinity fast enough: just where does the money go? Britain is a fairly rich country and the people in it are, on the whole, well off. Yet there is never any money for what matters.

Businesses are not expanding, not hiring, not investing; charities are short of funds; arts and think-tanks cannot raise enough and don't even ask about research institutions. When asked, we all blame the amount we hand over in taxes here and there yet our public services, whether it be education, transport, police or anything else you care to name, are among the worst in the Western world. So where does the money go?

Here are two stories to be pondered over.

One comes from the Daily Wail but is backed by others, such as the Independent and the Telegraph; even the Grauniad who was responsible for the story in the first place is getting a little tetchy. It seems that Glenn Mulcaire, who was actually arrested in connection with the phone hacking enquiry, could not have been party to the biggest scandal of all, the deletion of Milly Dowler's messages, action that had given the family false hope.

Surrey police is, according to the story in the Indy, desperately looking for yet another NoW journalist who might have been responsible. Or, perhaps not. As the Daily Wail says:

Scotland Yard yesterday said it has absolutely ‘no evidence’ that News of the World journalists deleted Milly Dowler’s voicemail messages.

The police force’s barrister made a dramatic intervention at the Leveson inquiry into press standards.

Neil Garnham QC said the ‘most likely explanation’ for the disappearance of the messages is that they automatically ‘dropped off’ the network after 72 hours.

It seems that the police may have wanted to tell the family this but were not allowed to do so by the family lawyer. Perhaps.

What does seem to be the case is that this huge enquiry, investigation and scandal may have been started on largely false pretences (most of the rest of the "evidence" remains unsupported tales by celebs looking for publicity) and has resulted in the closing down of a newspaper (no, I never read it but that is not the point), the loss of 400 or so jobs and a threat of strict control over the media. Not to mention what looks like a wrongful arrest. Behind it all looms the question that one cannot help asking: given the loud complaints about the police not paying enough attention to crime, not solving more than a tiny proportion, not being able to control looters in the street, why exactly do they spend so much time, money and energy on cases that involve celebrities? (Or travelling to Barcelona to enquire into vague rumours to do with the McCann story?)

Story number two, in the Evening Standard, comes from my neck of the woods, the Borough of Hammersmith of Fulham, whose council, as it happens, is one of the more efficient ones in the country, the White City estate and the Westfield shopping centre, which has been a huge commercial and social success.

Stephen Greenhalgh, who has led Hammersmith and Fulham council for five years and is close to Boris Johnson, wants to help channel Whitehall and local authority funds to the White City Estate in Shepherd's Bush.

He said: "White City has been a huge disappointment over a long period of time in terms of money that has been spent. For example, Westfield opened in the area with 8,000 new jobs and very few of them went locally.

"Nearly £70 million of taxpayers' funds - or £17,000 per household - is spent in this area every year. Despite this, unemployment is twice the borough average, the area has high levels of overcrowding, relatively low educational attainment and relatively high levels of crime." Commentators said the move could lead to similar projects being set up around London.

I recall that when Westfield opened they announced their commitment to local jobs. I also recall that when the snow came most of the shops had to close because the staff could not get in, which would indicate that by then the jobs were not local or that the local talent could not be bothered to walk down the road to the place.

Nevertheless, this is a pertinent question. Just exactly why have only a few of the Westfield jobs gone locally in a high unemployment area? And, even more to the point: what on earth does the £70 million a year go? If Stephen Greenhalgh can find that out he is a better man than most. I await his report with interest. He will report, will he not?

Who is right, HMG or the Commissioner?

There seems to be some problem about those powers to scrutinize member states' budgets that the Commission is claiming despite, as Lord Pearson of Rannoch pointed out yet again and to some murmured agreement in the House:

My Lords, is it not grotesque that an organisation that has not had its accounts signed off by its own internal auditors for 17 years-there being no external auditor-should be handed these powers, given that if it had been a private company in this country the directors would have been in prison every year for the past 17 years?

And yet there are noble peers like Lord Davies of Stamford who can come up with questions such as this:

My Lords, a few years ago was there not a proposal that the Commission be given a duty of auditing the national accounts of member states? That proposal was turned down at the time by the Council. Is it not the case that if it had not been turned down and had been accepted, we would have had an earlier insight into the problems of Greece, the Greeks would have been unable to falsify their accounts, and the grave problems we all now face might have been significantly reduced?

Is an organization who has not had its own accounts (or budget as it is grandly named) signed off by the Court of Auditors really a competent judge of what is and what is not adequate auditing?

All this was part of a short debate on Lord Willoughby de Broke's Starred Question last week:

To ask Her Majesty's Government what is their assessment of the proposal by the European Commissioner for Economic and Financial Affairs that the European Commission should have the power to scrutinise member states' budgets and impose such financial penalties as the Commission deems fit.

As ever Lord Sassoon waffled in response though appeared to agree with the idea that national budgets should be subject to discipline from the Commission whose own budget ... etc etc.

My Lords, the Government strongly support the recently agreed economic governance legislation to strengthen the stability and growth pact. This provides for stronger and more responsible economic governance across the European Union. Under the new legislation, a range of financial sanctions can be imposed by Council within the euro area where member states are deemed not to have taken adequate action. Sanctions are set out under Article 136, which applies to the euro area only.

Lord Willoughby then came back:

My Lords, I am grateful to the Minister for that reply. However, the statement by Commissioner Olli Rehn applies not just to the eurozone but to the whole of the EU, including this country. Therefore, will the Minister confirm that today's Autumn Statement by the Chancellor is nothing more than an aspiration-a wish list? Will he confirm to the House that this will have to be ticked off and agreed by the European Commission before it can take any effect?

The response was somewhat mystifying though the noble Minister did admit that Britain is not entirely free from the various eurozone-related rules:

My Lords, this country has always been party to the stability and growth pact, but as I am sure the noble Lord knows, under Protocol 15 the UK has an opt-out, which means that we have to endeavour to avoid excessive deficits but are not subject to any sanctions such as members of the euro area are. Furthermore, the UK secured particular treatment that ensures-has ensured and will ensure-that Parliament will always be allowed to scrutinise the UK's budget ahead of the European Commission.

It is, of course, reassuring to know that the House of Commons who had, in days gone by, fought for the right to control the finances of this country, will, for the time being, be allowed to scrutinise the UK's budget ahead of the European Commission. Allowed? By whom? As if I didn't know.

There is, however, a problem with the noble Minister's answer that he so blithely insisted on. Not so long ago, Commissioner Olli Rehn, he who is responsible for the EU's Economic and Financial Affairs, published an article in the Daily Telegraph, in which he reiterated his statement on the matter of the six new pieces of regulation that had been nodded through in order to "stabilize the eurozone" or some such strange notion. In this he made it clear that more than just the eurozone is intended.

When this legislation enters into force later this year, the EU will have in place a much stronger framework for preventing the economic mistakes that have cast a shadow over the recent past.

We will be able to scrutinise the Member States' public finances, in particular the level of debt, much more carefully and pre-emptively than ever before. This will include co-ordinated examination of economic policies and budgets in the first half of each year before their adoption by national parliaments in a process known as the European Semester. And budgets will have to be designed and presented according to a common framework, in line with best international standards, so that budget-making is more transparent both for citizens and policy-makers.

No mention of the UK's opt-out there or in this statement of November 8.

This is first and foremost about safeguarding financial stability in the euro area and in the EU by exerting preventive and effective surveillance, according to the rules we have democratically given ourselves.

Let me be very blunt on this: It's either the EU institutions, according to our own rules, procedures and democratic accountability, or the market forces that will do the job. For me, as a committed European and a committed democrat, the choices are clear.

So who is right? The Minister or the Commissioner?

A problem we face in our discussions

An exchange towards the end of the Second Reading of Lord Pearson's Bill demonstrates clearly one of the problems we face when we discuss even the purely economic aspect of our membership of the EU (not our relationship with Europe, please).

If you scroll down to Lord Sassoon's reply on behalf of HMG you will find the following words:

While we are on this topic, I would say to the noble Lords, Lord Pearson of Rannoch and Lord Willoughby de Broke, that I do not recognise the numbers that they were quoting. The net contribution of the UK to the EU in 2010-11 is estimated at £7.6 billion, up from £4.7 billion in 2009-10, but of course the reason for that increase is because of the give-away that the last Government gave on the UK's abatement. Having stepped up very significantly to the new level, the OBR's figures are that the numbers now remain broadly level over the next few years.

Lord Pearson intervened with the following:

For clarity's sake I should say, following on from what the Minister has just said about our gross and net contributions, that he is talking about the Treasury figures. The figures that we gave are from the pink book and include all our contributions to the European venture, whether they go through the Treasury or not, such as the DfID budget. So I am afraid that our figures are the correct figures.

From which we can assume that HMG does not use the figures published in the Pink Book.

Lord Sassoon added another complication to that discussion:

My Lords, I was quoting the figures of the independent Office for Budget Responsibility, not the Treasury's own figures, but let us turn to the more important issue: that Europe must pursue an ambitious agenda for growth. In the single market, I believe that we have one of the most powerful tools to ensure strong, sustainable and balanced growth not only across the EU but for the UK. The noble Lord, Lord Watson of Invergowrie, quoted all the figures that Ministers would customarily quote, so I am very grateful to him for helping me out. I will simply emphasise that this is a market worth €12 trillion and home to 500 million consumers.

Setting aside the last sentence of that paragraph, which is irrelevant as the market and the consumers will not disappear with our departure from the EU and, in any case, we do better in other markets, there remains the problem of figures: exactly which ones are accurate?

Goal posts being shifted again

Lord Pearson of Rannoch asked HMG why there has been a "further" delay in the publication of the Pink Book, a.k.a. the United Kingdom Balance of Payments. Lord Wallace of Saltaire called upon Stephen Penneck, Director General for ONS, to reply:

The 2011 Pink Book was initially scheduled for publication on 1 November 2011. On 29 September, after consultation with key users, the ONS announced a modification to the timetable for various publications, including the Pink Book. The ONS announced that the Pink Book would be delayed until 23 November. The full announcement can be read at: http://www.ons. gov.uk/ons/media-centre/statements/national-accounts-publication-timetable.html.

The delay to the timetable was announced to ensure that the ONS could fully implement significant changes in the 2011 edition of the UK national accounts-the Blue Book. The changes included the introduction of a new industrial and product classification required by European Regulations SIC07 and CPA08 respectively, improved methods of deflation and some additional improvement in the financial services area. Because the balance of payments estimates for the UK are produced as an integrated part of the whole national accounts, these changes had an impact on the Pink Book timetable.

Or, in plain English, they are shifting the goal posts again.

Good money after bad

The G20 is over and, not unexpectedly, the outcome is to boost IMF resources for further bail-outs "to boost growth and rebalance the global economy". Details to be announced and the plans to be put into place by February 2012. Well, a lot of things can happen between now and then but if these plans are put into place and if HMG agrees (which it will, as the Boy-King has made clear) then there will be a vote in the Commons. How will all our rebels vote then and how many of them will go through both lobbies in order to acquire a reputation without paying the price?

France and Germany are also in favour of a financial transaction tax and, according to Sarko, hope it will be implemented in 2012, presumably before the French presidential elections. As far as we know HMG is against this idea that is likely to cripple the City but boost governmental income for a little while.

Is this likely to work?

Do we even know what the purpose of it is? Never mind, it sounds good. I am talking about Big Society Capital, formerly known as Big Society Bank but renamed on the insistence of the Financial Services Authority, who has now acquired a Board. What do you mean it is not a bank? It may not have any money but it has a Chairman and a Board and good intentions. What more do you need?

The money will be supplied by the government from what they are pleased to call "dormant accounts" and four very reluctant high street banks: HSBC, Barclays Capital, Royal Bank of Scotland and Lloyds Bank Group. They are insisting that money should be loaned on commercial terms (i.e. not handed out to anyone who comes up with what looks like a bright idea of social investment). On top of that, there is the problem that the Commission might call using "dormant accounts" state funding and that particular problem has not been cleared yet. Also, people might turn up and claim said accounts.

The combination of the lack of state aid clearance and the banks’ conditions on their support means that Big Society Capital as yet has no money in the bank, Nick O’Donohoe, its chief executive, said.

But it has approved in principle its first investment of £1m through the Big Lottery Fund, which is holding proceeds from the dormant assets until clearances are received from the European Commission and Financial Services Authority.

The investment will go to the Private Equity Foundation to develop social impact bonds to get disadvantaged young people into work.

Disadvantaged, in this case, means those who have committed criminal offences.

Social Enterprise gives a warmer welcome to this idea and lists all the Board members but mentions the same problems with the European Commission and the FSA.

Although neither state aid approval from the European Commission or regulatory approval from the FSA has been finalised – both of which are needed before Big Society Capital can get its hands on the money – Minister for the Cabinet Office Francis Maude, who hosted this week’s announcement at 70 Whitehall, said he was confident that both were proceeding without the prospect of a problem.

Sir Ronald Cohen, the renowned venture capital and social investment pioneer, has agreed to serve as the unpaid, interim chair of Big Society Capital Limited until it is fully operational and its board has conducted a search for a more permanent chair.

Of course, it is possible that a better education system, more training and a less tax and regulation encumbered economy would be a better idea in the long term. But would that provide quite so many jobs and positions for people who are already in the system?

Democracy is very "disappointing"

Or at any rate, our and the Dutch government are terribly disappointed as is Joe Lynam of the BBC, not to mention Iceland's Prime Minister. For the second time the people of Iceland have voted in a referendum against paying out their money for what was a monumental cock-up on the part of the EEA, EFTA, the banks, people who put their money in those banks (often our local councils) and the UK and Dutch governments.

The Dutch and the British governments are now contemplating court action in the European Free Trade Association Surveillance Authority. This may not be such a good idea as the whole process will take at least a year and a half, probably more and all sorts of interesting things might come out about the lack of proper stringency in the financial processes that allowed the Icesave fiasco to happen.

Joe Lynam thinks Iceland might be the loser:

The consequences of this referendum vote is that Iceland's years in the financial wilderness could be extended much further.

Moody's and other ratings agencies look set to downgrade the country even further, making it prohibitively more expensive to borrow on the open markets.

Iceland's bid to join the EU will be paused or even vetoed by Britain and the Netherlands. And the tiny Atlantic economy is facing legal action in the EFTA court which might force it to pay up sooner than planned and at a punitive interest rate.

Democracy doesn't pay if you're an Icelander.

That is not quite the way it looks at present. Icelanders have voted against their tax money being used in this exercise and they are not going to be joining the EU. Sounds to me like they might be winners. As for Moody's and other rating agencies, they are not quite as predictable or reliable as Mr Lynam seems to think.

The Governor of Iceland's Central Bank thinks that this could impede foreign borrowing. Whereas, of course, what is happening within the EU, apparently the now unattainable goal for Icelanders, is a fiscal paradise.

Even I'm speechless

But not for long. Still, momentarily, this piece by Nile Gardiner silenced me.

It would appear that the European Instrument for Democracy and Human Rights (err, what?) is giving millions of euros, which they do not find on trees, to American anti-death penalty campaigns. Oh goody. Not only they are using our money for purposes hardly intended, they are also interfering with the domestic politics of another country. Indeed, they are interfering with individual State politics within the United States. This is, of course, the sophisticated soft diplomacy of the EU that is so different from American interference in other people's affairs. Oh, I suppose that was only true under President Bush.

Apparently, this organization's key objectives are:

Enhancing respect for human rights and fundamental freedoms in countries and regions where they are most at risk;

Strengthening the role of civil society in promoting human rights and democratic reform, in supporting the peaceful conciliation of group interests and in consolidating political participation and representation;

Supporting actions in areas covered by EU Guidelines: dialogue on Human rights, human rights defenders, the death penalty, torture, children and armed conflicts and violence against women;

Supporting and strengthening the international and regional framework for the protection of human rights, justice, the rule of law and the promotion of democracy;

building confidence in and enhancing the reliability and transparency of democratic electoral processes, in particular through monitoring electoral processes.

The United States being a particularly bad example of all these bad things, in the EIDHR's estimation.

Nile Gardiner gives some details:

Here is a list of US recipients of EU EIDHR aid in 2009, which amounted to €2,624,395 ($3,643,951). The recipients of EU aid include the rather wealthy American Bar Association, whose annual budget approached $150 million in 2008.

American Bar Association Fund for Justice and Education: EU grant: €708,162 ($983, 277)
Project: The Death Penalty Assessments Project: Toward a Nationwide Moratorium on Executions

Death Penalty Information Center: EU grant: €193,443 ($268,585)
Project: Changing the Course of the Death Penalty Debate. A proposal for public opinion research, message development, and communications of capital punishment in the US.

The National Coalition to Abolish the Death Penalty: EU grant: €305,974 ($424,829)
Project: National Coalition to Abolish the Death Penalty Intensive Assistance Program

Reprieve LBG: EU grant: €526,816 ($731,591) (some of these funds also went to “European countries”) Project: Engaging Europe in the fight for US abolition

Murder Victim’s Families for Human Rights Non-Profit Corporation: EU grant: €495,000 ($686,608) (some of these funds also went to other countries, including Japan and Taiwan). Project: Voices of Victims Against the Death Penalty

Witness to Innocence Protection: EU grant: €395,000 ($548,538)
Project: American DREAM Campaign

Time to ask a few questions on both sides of the Pond, methinks. (Oh and the issue here is not the death penalty as such. I am not expressing any views on that.)

Hmm, let me think

We find from the news that the government has made another step towards abolishing the Royal Navy and opt out of the global fight against piracy and drug smuggling.

Then we have Georgie-Porgie announcing "an £800m increase to the government’s bank levy" purely because he thinks his Shadow, Ed Balls might accuse him of not being tough enough on bankers and because he thinks banks should not have big profits (nobody should have profits according to the Cleggeron socialists), while still hoping to negotiate some deal whereby those same banks will be forced to lend money to small and medium-sized businesses whether they are a good risk or not. (Are we allowed to whisper sub-prime mortgages?) As the British Bankers' Association pointed out, chopping and changing is not exactly the right way to ensure that Britain remains business-friendly. (Though, it is, as they don't say, just the ticket if all you are looking for is another headline.)

Then there is news that HMG will be demanding that universities should widen the social base of their intake if they want to be allowed to have top-up fees. They must limit the numbers they take from independent schools and lower admission criteria for pupils from what might be termed disadvantaged backgrounds. Of course, the obvious way of restoring the sort of social mobility this country had in the fifties and sixties is to restore the sort of schooling that was provided at the time. That, alas, does not appeal to our government of privately educated nit-wits. (This is being pointed out by the Daily Mail and its blogger Harry Phibbs but screaming abuse at universities and demanding that their standards should drop even more is a much easier option for politicians.)

All I can say is that I am very glad that we no longer have an interfering, big-state, socialist government that surrenders our armed forces to the EU. And that would be quite funny if it wer not so tragic for the country and its people.

Nothing like a healthily growing backlash

Bruno Waterfield, the Telegraph's hack in Brussels, tells us that there is a growing backlash against perks for EU officials. Fury, he informs us, is spreading. Well, good for fury, say I. And, indeed, for backlash. Maybe I shall call my next two cats Fury and Backlash. I have no doubt they will grow and spread all over the house. But let's be practical. Exactly, what are those terrible twins, Fury and Backlash going to do? Here are a few indications:

Despite being paid six figure salaries, 1,962 of EU's most senior civil servants have been allowed to join a "flexitime" scheme, originally meant for lower paid secretarial staff, that gives an extra 24 days off work every year for those that put in an extra 45 minutes a day in the office.

The perk comes on top of annual holidays of 24 days as well as seven days off for public holidays, and in 2010, 11 "non-working" days out of the office when the Brussels institutions are closed in summer and at Christmas.

The allowances mean that last year many EU staff were entitle to 66 days or 13 weeks or a quarter of the year off work.

Inge Grassler, the German Christian Democrat MEP who uncovered the time off perk, has urged that the "flexitime" is tightened up to exclude senior EU officials, whose working hours are not measured by the clock.

"This information must mean the death of the myth of the hard-working Commission official," she said.

"I have no sympathy for time off in leadership roles. Those who earn six figures must sometimes be willing to work more than 37.5 hours – as is customary in industry."

Stephen Booth, of the Open Europe pressure group, said: "If the top ranks of the EU's civil service can take this much time off it raises interesting questions about how much work they're actually doing."

And if that was not frightening enough:

On Tuesday, Bavaria's Christian Democrats, key allies of Chancellor Merkel, declared that a "radical overhaul" of EU pay and privileges was long overdue.

Markus Ferber, a senior German MEP, said: "The privileges of EU officials must be abolished as quickly as possible."

Besides, as Mr Waterfield reminds us, one must not forget that David Cameron has "wooed" Nicolas Sarkozy and Angela Merkel into accepting the notion of freezing future Brussels budgets. Oh no! Not the great budget freeze! Just look how successful it was this time round.

No, not quite

No, this is not quite the salvation the country has been waiting for. The Boss on EUReferendum points out a couple of things about the so-called spending cuts. One is that they are not exactly cuts, merely a decrease in the rate of increase. That most of us realized despite all that cheering and yelling from the camp-followers. But another important matter is that

Even after these spending cuts, total public spending (Total Managed Expenditure) in 2014-15 will be higher in real terms than in 2008-09. At 41 per cent of GDP, this will be around the same level of public spending as in 2006-07. Spending on public services in 2014-15 will be higher than 2006-07 levels in real terms.

Where does that information come from? Page 17 pf the full Treasury Report.

Budget cut-backs are not popular

Further to the pious hope expressed by Lord Howell (or whoever was writing that reply)

At a time when Governments across the EU are reining in their spending, it is only right that the EU institutions think carefully about every euro that they spend to ensure that they get the most from their money. We are currently pushing for a freeze in the 2011 budget and expect salary levels to reflect the current economic conditions.

The European Voice reports a great deal of outrage in the Toy European Parliament on the subject.

Members of the European Parliament have accused national governments of seeking cuts to the European Union's budget that would undermine attempts to spur economic growth.

Ambassadors from the member states have agreed a draft budget for 2011 of €126.58 billion, €3.6bn less than the draft budget presented by the European Commission in April. The reductions agreed by the ambassadors would affect most areas of EU spending, but the biggest cuts would be to programmes intended to boost growth and competitiveness. The Council of Ministers wants to cut the allocation for growth by almost €2bn and save €1.075bn on cohesion spending compared to the Commission's proposal. A further €821 million would be cut from spending on support to farmers and the fisheries sector.

To a more or less rational person the idea of taking more money away from the potentially productive sectors of society and giving them to the leeches that constitute the eurocracy would contribute to economic growth is insane but these puffed up little muppets (apologies to Kermit, Miss Piggy et al) really do believe it that they are the ones who are essential for that process.

Sidonia Jedrzejewska, a Polish centre-right MEP who is preparing the Parliament's position on the 2011 budget, told her colleagues on the budgets committee: “I take these cuts not only as a provocation but as an offence.” She pointed out that the budget lines concerned were supposed to pay for the Europe 2020 strategy, which aims to boost competitiveness and stimulate growth. Jedrzejewska called plans to cut the budget for youth training programmes, which the Parliament has made a priority, “a slap in the face”.

The Europe 2020 Strategy was, as this blog mentioned before, the one thing that came out of the last European Council. It is to be the replacement for the Lisbon Strategy that was going to make the European economy [sic] the most modern and most competitive by 2010. And what a success that was.

Seven member states, Austria, the Czech Republic, Denmark, Finland, the Netherlands, Sweden and the UK, think that the Council has not gone far enough and there should be even further cut-backs. After all, they argue, we all have to introduce austerity measures and, indeed, the Commission is demanding that; it seems somewhat wrong for the EU budget to remain as large and as wasteful as it has been all these years. One might argue, pace certain Polish apparatchiks centre-right MEPs that continuing to extract money for EU projects when everything else, including employment is being cut back, is a slap in the face of the taxpayer.

And how, exactly, are we going to control it?

A Written Question from Lord Stoddart of Swindon deals with those Brussels salaries.

To ask Her Majesty's Government which European Union Commissioners and officials receive a higher salary than the Prime Minister.

The reply is only partial since you cannot expect civil servants to find out the facts required. However, the following was put down in the name of Lord Howell of Guildford:

My right honourable friend the Prime Minister's salary of £142,500 equates to approximately €170,000 (at current exchange rates). All 27 members of the College of Commissioners receive a higher salary than this. We do not hold information as to which EU officials earn a salary in excess of €170,000.

We do not have access to the salary details of individual EU officials. We do have access to salary scales and the approximate number of officials in each grade. Officials in grades AD 16 and AD 15 (director-general level) have scales in which the minimum is above the salary of the Prime Minister. There are some 300 staff in these grades.

One could argue that it is right and proper that members of the real government should earn more than their regional representatives. All the same, that is rather a lot of people who earn over £142,500 out of the public purse, Europe-wide though it may be. Let me emphasise that this only the salary. Both Westminster and, especially, Brussels provides generous perks and expenses.

The last paragraph of the reply is interesting in its own way:

At a time when Governments across the EU are reining in their spending, it is only right that the EU institutions think carefully about every euro that they spend to ensure that they get the most from their money. We are currently pushing for a freeze in the 2011 budget and expect salary levels to reflect the current economic conditions.

And if it does not happen? We'll thcream and thcream until we are thick? If only we did have a Violet Elizabeth Bott to negotiate on our behalf.

That's the way the money goes ...

In response to a Written Question by Lord Pearson of Rannoch about the various funds contributed by HMG on our behalf and with our money (so kind of them) to various transnational organization, this reply was published:

The United Kingdom's interests are represented through its membership in various international institutions and fora. Information regarding the UK's financial relationship with a particular institution is a matter for the relevant government department.

The Government's latest estimate of the UK's gross contribution to the European Union, after taking account of the UK abatement, was published in Table 3, page 62, of the 2009 European Community Finances White Paper (Cm 7640). This was published on 20 July 2009 and is available in the Library of the House. The figure for 2008 is £7,791 million and the estimate for 2009 is £7,770 million.

Information on UK financial contributions to the IMF is available on a net basis for 2008-09 in the Government's latest report to Parliament on the UK and the IMF, published in June 2009. Quota subscriptions determine the amount a member country can be asked to lend to the IMF. The UK's net contribution under its quota subscription was £1,134 million in 2008-09. The UK also provided £624,000 in grants in 2008-09 to support the IMF's work in low-income countries.

Information for the Commonwealth, the United Nations and the Organisation for Economic Co-operation and Development are matters for the Foreign and Commonwealth Office. The relevant information is available in the FCO's annual report. The most recent annual report shows that for 2009-10 the FCO's budgeted provision for the Commonwealth Secretariat was £4.6 million, for the UN regular budget was £75.6 million and for the OECD was £12.5 million.

Information on the World Trade Organisation is a matter for the Department for Business Innovation and Skills. The WTO subscription for the calendar year 2009 was £6,061,004 (Swiss Francs 9,652,149) paid on 26 January 2009.

Information on the World Bank is a matter for the Department for International Development. Data on UK financial contributions to the World Bank are available for 2008-09 in Statistics on International Development 2009 on the DfID website. In 2008-09 the UK contributed £524.8 million to the International Development Association and £49.8million for multilateral debt relief contributions to the World Bank. In addition, the UK contributed £595 million to trust funds which are administered by the World Bank.

And pop goes the weasel or, in this case, the country.

Some radical ideas

One of the few think-tanks in this country that produces worthwhile material is Reform. In anticipation of next week's Budget they have produced their own ideas that, sadly, would require a great deal more courage and imagination than the Coalition has displayed so far. I keep being told that I should give Cameron a chance (though nobody has yet suggested that I should give Osborne a chance) so, maybe, we should wait till next week.

In the meantime here is the alternative Budget in full.

Same old, same old

It appears that the colleagues in Brussels are all breathing a collective sigh of relief because the new Conservative (well, ConLib) Prime Minister, Foreign Secretary and Chancellor of the Exchequer have turned out to be not so eurosceptic after all. In fact, they are all bending over backwards engaging constructively with the European project (of which this country is part).

Take the Chancellor of the Exchequer, Georgy-Porgy Osborne (well, OK, I'll take him). He has been engaging constructively with the Ecofin by obsequiously going early to the meeting and launching a charm offensive. Those of us with slightly longer than average memories (i.e. beyond last week's media coverage) can recall the charm offensive launched by John Major after the eurosceptic horrors of the Thatcher government and the even bigger charm offensive launched by Tony Blair after the eurosceptic horrors of the Major government. I shall be grateful to any reader who can furnish me with examples of achievements by those charm offensives.

The immediate outcome of Mr Osborne's charm offensive, apart from all those sighs of relief from the colleagues, has been Ecofin's agreement, in the teeth of British opposition to new rules for hedge funds.

Instead the chancellor was praised by EU colleagues for taking a constructive approach, which ended up with finance ministers agreeing to "note the concerns expressed" by the UK, which hosts 80 per cent of Europe's hedge funds.

Well, as long as they noted the concern shown by the country that hosts 80 per cent of Europe's hedge funds, everything is all right. Apparently, the FT sees nothing wrong with the fact that the country with 80 per cent of those hedge funds not only cannot control the regulatory structure but cannot even make its views heard properly among all the other countries, who are all contributing to the control though not to the hosting of the funds. As this blog said over and over again: the real government is in Brussels, regardless of who might win the election.

So, what have we got in return for the charm offensive: ah yes, those concerns have been taken note of and Mr Osborne tells us that there is still much to play for. This, if memory serves (and it does), was the constant refrain of various governments in the past as they surrendered one power after another.

Mr Osborne is clearly going to be spending a great deal of time in Brussels, which is right and proper in the circumstances.

He may be back in Brussels on Friday fighting on another front, this time opposing a suggestion by the European Commission that national budgets be submitted for prior scrutiny by other EU member states. "National parliaments must be paramount," he said. "I'm perfectly happy to discuss details of the Budget with the Commission but only after it has been discussed in parliament."

National parliaments are hardly paramount now. If they were rules passed in Brussels about hedge funds would not matter. Still, it will be interesting to see whether Mr Osborne's charm offensive continues with the same success.

Then there will be other occasions for that constructive engagement:

Rather than fighting a last-ditch battle over hedge funds, Mr Osborne wants to keep his powder dry for a much bigger debate next month over plans to create an EU-wide regulatory system for financial services.

A review of the next seven-year EU budget will begin later in the year, putting Britain and France on course for their regular battles over farm subsidies and the UK's budget rebate.

Oddly enough I do not recall any mention of these battles and opportunities for the charm offensive mentioned during the election campaign or those much-touted TV debates. UKIP, whose leader did talk about the creeping control of the City, was sidelined during the last two weeks of the campaign by the media as it concentrated on the three main parties.

There is, however, one group of people on whom Mr Osborne's charm offensive was wasted: the hedge fund managers. Well, what do they matter? Only the people who bring business and income to this country.

Interesting data

This was called to my attention by Ian Milne, quondam editor of Eurofacts, and the man who probably knows more than anybody about the fiscal side of our membership of the EU. When I say anybody, I include all politicians and journalists.

The figures are on pp 130 -132 of the 2009 Pink Book. "These figures," - says Ian - "include payments & receipts to & from not just the EU Budget, by & to HM Treasury, but other payments/receipts by other UK ministries (e.g. DIFID) & by private-sector or quasi private-sector bodies."

So here they are for the year 2008:

In £ billion:

We paid gross: 16.4
We received back: 9.8
Our Net contribution: 6.6

In my opinion we should not be looking at net contribution but at gross, anyway. After all, when we pay our taxes we do not say "yes, I paid this much but this much was spent on the NHS or whatever so I need to reckon net amounts only".

As Ian also helpfully reminds us, £16.4 billion divided by 365 means that we pay £45.25 million every day. (To be fair, 2008 was a Leap Year but to be also fair, the figures for 2009 and 2010 will be higher.)