Sunday, October 24, 2010

About that EU budget increase

Let us start in the House of Lords where the Comprehensive Standing Review Statement was repeated by Lord Sassoon, the Commercial Secretary to the Treasury, on Wednesday afternoon. During the debate after it, Lord Stoddart asked a very reasonable question (Lord Stoddart specializes in being very reasonable and it seriously annoys the europhiliacs)
The Government have ring-fenced health and overseas aid. Is there not another item that has been ring-fenced? It is our net contribution to the European Union, which is £6.7 billion this year. Would the Minister agree that if that were reduced by 20 per cent, it would enable 55,000 more nurses, policemen or teachers to be employed? Should our country not come first rather than subsidising other countries?
Whether we really do want all those extra nurses, policemen and teachers is a separate issue. But our contribution to the EU Budget has not only been ring-fenced, it is actually set to increase.

I can't say that Lord Sassoon's response filled me with any great cheer:
I thank the noble Lord, Lord Stoddart, for a question that reminds us that we are working extremely hard as a nation to live within our means. It is equally important that within Europe the European Union also lives within its means. The Government will be doing everything they can to make sure that proper financial discipline is applied to the European budget this year and for the next spending period. I do not know, but I have a sense-I might like to ask on the subject-that the Labour Members of the European Parliament were today voting to allow the European Union to have its own tax-raising powers to fund a separate pot of money. The present Government want to see proper discipline applied to European Union expenditure.
It really is time members of Her Majesty's Government and, indeed, all politicians realized that as far as the Toy European Parliament is concerned these party games are meaningless. That is not how that institution works. In any case, what Lord Sassoon should have been concentrating on is the vote on increasing the EU Budget by 5.9 per cent which will raise the UK's contribution by another £843 million, taking its gross contribution to £15.67 billion. (In parenthesis, let me note that I see no rationale for looking at "net" contribution. After all, nobody says: "Ah yes, I pay so much in tax but get so much back in whatever the government decides to spend the money on so my net tax contributions is really only this.")

In the meantime, the Boy-King has realized that this might be quite a difficult issue and has come out fighting huffing and puffing, as the Boss on EURef has noted. No harm in going through it again.

First of all, as the Boss has pointed out, if we get away from the headline, what we actually get is:
Dismissing calls for extra money from British taxpayers as “outrageous”, he said he would lead a rebellion to force the EU to make cuts in line with those being made by national governments.
Oh wizard! He will lead a rebellion? He and whose army of rebels? And how is he going to lead it after the Toy Parliament has already passed the increase?

How the EU Budget is decided is, like everything else, defined in the Treaties. Article 314 [scroll down]states:
The European Parliament and the Council, acting in accordance with a special legislative procedure, shall establish the Union's annual budget in accordance with the following provisions.

1. With the exception of the European Central Bank, each institution shall, before 1 July, draw up estimates of its expenditure for the following financial year. The Commission shall consolidate these estimates in a draft budget. which may contain different estimates. The draft budget shall contain an estimate of revenue and an estimate of expenditure.

2. The Commission shall submit a proposal containing the draft budget to the European Parliament and to the Council not later than 1 September of the year preceding that in which the budget is to be implemented. The Commission may amend the draft budget during the procedure until such time as the Conciliation Committee, referred to in paragraph 5, is convened.

3. The Council shall adopt its position on the draft budget and forward it to the European Parliament not later than 1 October of the year preceding that in which the budget is to be implemented. The Council shall inform the European Parliament in full of the reasons which led it to adopt its position.

4. If, within forty-two days of such communication, the European Parliament:

(a) approves the position of the Council, the budget shall be adopted;

(b) has not taken a decision, the budget shall be deemed to have been adopted;

(c) adopts amendments by a majority of its component members, the amended draft shall be forwarded to the Council and to the Commission. The President of the European Parliament, in agreement with the President of the Council, shall immediately convene a meeting of the Conciliation Committee. However, if within ten days of the draft being forwarded the Council informs the European Parliament that it has approved all its amendments, the Conciliation Committee shall not meet.

5. The Conciliation Committee, which shall be composed of the members of the Council or their representatives and an equal number of members representing the European Parliament, shall have the task of reaching agreement on a joint text, by a qualified majority of the members of the Council or their representatives and by a majority of the representatives of the European Parliament within twenty-one days of its being convened, on the basis of the positions of the European Parliament and the Council. The Commission shall take part in the Conciliation Committee's proceedings and shall take all the necessary initiatives with a view to reconciling the positions of the European Parliament and the Council.

6. If, within the twenty-one days referred to in paragraph 5, the Conciliation Committee agrees on a joint text, the European Parliament and the Council shall each have a period of fourteen days from the date of that agreement in which to approve the joint text.

7. If, within the period of fourteen days referred to in paragraph 6:

(a) the European Parliament and the Council both approve the joint text or fail to take a decision, or if one of these institutions approves the joint text while the other one fails to take a decision, the budget shall be deemed to be definitively adopted in accordance with the joint text; or

(b) the European Parliament, acting by a majority of its component members, and the Council both reject the joint text, or if one of these institutions rejects the joint text while the other one fails to take a decision, a new draft budget shall be submitted by the Commission; or

(c) the European Parliament, acting by a majority of its component members, rejects the joint text while the Council approves it, a new draft budget shall be submitted by the Commission; or

(d) the European Parliament approves the joint text whilst the Council rejects it, the European Parliament may, within fourteen days from the date of the rejection by the Council and acting by a majority of its component members and three-fifths of the votes cast, decide to confirm all or some of the amendments referred to in paragraph 4(c). Where a European Parliament amendment is not confirmed, the position agreed in the Conciliation Committee on the budget heading which is the subject of the amendment shall be retained. The budget shall be deemed to be definitively adopted on this basis.

8. If, within the twenty-one days referred to in paragraph 5, the Conciliation Committee does not agree on a joint text, a new draft budget shall be submitted by the Commission.

9. When the procedure provided for in this Article has been completed, the President of the European Parliament shall declare that the budget has been definitively adopted.

10. Each institution shall exercise the powers conferred upon it under this Article in compliance with the Treaties and the acts adopted thereunder, with particular regard to the Union's own resources and the balance between revenue and expenditure.
I think we can say with some justification that the Boss over on EURef is absolutely correct. The chances of the Boy-King actually doing anything about this are similar to my chances of being asked to dance the lead in the next production of Swan Lake at Covent Garden. The real question is does he know this? Has he read Article 314 and does he understand it? In other words, we are asking that old old question: is he a knave or a fool or a combination of the two?


  1. I would put my money on this being a little show put on with the collusion of the EU for the benefit of Tory Euro-sceptics; Cameroon will lead his rag-tag Rebel Fleet to a pre-ordained victory and win a reduction in the increase. This will then be used over the next few years to "prove" that he is negotiating in our interests with all his might, and that he is the heir to Thatcher and we should all really, really, get behind and support him... As opposed to stabbing him in the back, which too many members of the "nasty party" seem to want to do for some reason.

  2. I think you might lose your money. I cannot see the EU and, especially, the Parliament deciding to give in to that nice Mr Cameron on the whole EU budget. Thatcher, after all, merely got the rebate while other members got various things themselves.

  3. Cameron as rebel leader (if the attached image shows up):

  4. I agree that there's no rationale for quoting a net figure. However, there are really two net figures. There's a gross UK contribution of about £14bn a year, depending on the GBP-EUR exchange rate. Most of us would agree that our rebate (as amended by Blair in 2005 for the budget round of 2007-13) should come off that figure. That gives a net contribution of about 10bn. That's my net. The europhiles then subtract the CAP payments and whatever deserves those ring-of-stars billboards that one sees by municipal projects. They come up with a (second net) figure of around 6bn. As I wrote in my book, one doesn't feel that one has paid less in income tax whenever one sees abstract artworks worth £50,000 in a hospital foyer, although the principle is the same.

    Reading Hugh Gaitskell's 1962 speech this weekend, I was struck by how much of it is still apposite. This, for instance: "The Tories have been indulging in their usual double talk. When they go to Brussels they show the greatest enthusiasm for political union. When they speak in the House of Commons they are most anxious to aver that there is no commitment whatever to any political union."

  5. I like the joke about Camoron as a "leader" of anything. He seem to be an arrogant bully, some of his, and I do mean his, party are let of from their overclaimed expenses but others who complain about the EU or global warming are insulted.

  6. Sorry, that should have read "let off", computer keyboards are hell!

  7. There is a political rationale for using the net figure. That is to sidestep the far more complicated debate that the issue of how much we give the EU is *always* diverted into. Namely, the grants and subsidies we get back, what they're used for, whether that's really any benefit to us, how farmers would survive without them blah blah. Better to my mind to say "forget all that - this is the net figure". Especially when the net figure is plenty shocking enough. Why make our task harder than it needs to be?

  8. Well, it is about time we tried to tell people the whole truth, StuartC. Making our task easier has not exactly got us as far as we would like to be by now. One could use both arguments, depending on the audience one speaks to or writes for. Agitation and propaganda, as Georgy Plekhanov, the first Russian Marxist, said are different and have to be aimed at different people. Time we thought about that.

  9. Well, I may have been right about their intention, though utterly wrong about how things will play out. I don't care though as I am finding it very funny that even the 2.9% increase is being portrayed in the commentary as being a complete failure (as it is of course). As Richard says, Cameron isn't just an evil conniving EUrophile, he's also incompetent as a politician unable to direct the narrative of even his own supporters and to keep those Tories who were giving him the benefit of doubt on-side.