European Communities (Finance) Bill

My Lords, the Minister, with his customary charm, has put such a gloss on events that it will take a little while to scrape off the coats of varnish and reveal the unvarnished truth. In plain language, the Bill puts the stamp of legality on a major betrayal of this country’s interests. It seeks to legitimise the act of Tony Blair in surrendering a part of our rebate, which was protected by our veto and which no one could touch without our agreement, for precisely nothing. We have a duty to put on record what happened and to explain in simple terms what led up to Mr Blair’s abject surrender before history is rewritten. It all started honourably enough with Mr Blair championing the expansion of the EU into eastern Europe and his acknowledging that the new members would need help as they shed socialism. The money could only come from the farm budget and that would lose the French money. But, thought Mr Blair, the French would be persuaded to agree to the reform of the common agricultural policy and to a drastic decline in farm payments if Britain sacrificed at least part of its rebate. It is not, as you will see, quite what Mr Blair told the British people, but it is clear when one pieces together his utterances that that is what he had in mind. It is fairly difficult if not impossible to understand how Mr Blair ever persuaded himself that the plan would work because back in 2002 he had persuaded Monsieur Chirac to agree to enlargement by promising the French president that French interests would be protected and, to that end, he had signed up to a common agricultural policy settlement which promised farmers continued subsidy to the tune of 40 per cent of the total EU budget right through to 2013. Inevitably, come 2005, the French were having none of Mr Blair’s plan. Faced, however, with the inevitable, ““Non””, there was not the slightest need for the Prime Minister to do what he did, which was, with great alacrity, to abandon his call for a budget freeze, abandon his call for a fundamental reform of Europe’s finances, and hand over part of our rebate on a plate. That is what he did, and no amount of ministerial waffle can disguise that fact. What, of course, he should have done was to take the rebate off the table, pack his bags and return home. But he surrendered. The tale now is that all this was necessary to secure enlargement and we could not ““will”” enlargement without being prepared to pay for it, but that really is rewriting history. Mr Blair told the Commons: "““The UK rebate will remain and we will not negotiate it away. Period””.—[Official Report, Commons, 8/6/05; col. 1234.]" When the then Chancellor of the Exchequer was asked in an interview whether the rebate was non-negotiable, he answered in one word—““yes””. Mark you, this was all said in 2005 when enlargement was already a fait accompli. With enlargement a done deal, Mr Blair was still saying the rebate is non-negotiable. He knew enlargement was going to cost money, but some of the money would have to come, he thought, from reform of the EU finances and reform of the CAP; as to the rest, everyone would have to chip in under the then existing system, which involved of course the continuance of Britain’s rebate. That is what he was, in effect, telling the British people. That was the plan, that was the promise, but it is certainly not what he finished up with. If the rebate had remained, Britain would have paid over the next seven years an extra £12 billion. Because of Blair’s surrender we stand to pay an extra £19 billion over the period, with things set to get worse after 2013 because the limit on the cost to Britain of the reduction in the rebate ends in that year—and, of course, there is no meaningful reform of the EU’s finances, let alone any reform of the common agricultural policy. Now we come to perhaps the most dismal part of the story. Where has the extra money gone? Scandalously, it is not, in the main, going to the main entrants. Unbelievably, Ireland, whose per capita income is 30 per cent higher than the EU average, is to get more per head than Lithuania, Slovakia or Poland. Furthermore, France, while becoming a net contributor, will remain the EU’s biggest recipient and the UK will remain the smallest. Mr Blair surrendered. As Philip Hammond in another place put it, that is something we have grown used to, and every surrender carries with it the same lame excuse. It is always said that we had to surrender; failure to do so would have precipitated a crisis and, even worse, shown our lack of commitment to the EU. We have heard that so many times. French critics of the French Government do not call it anti-EU when the French Government fight to protect the interests of their own taxpayers and citizens, and the British people are entitled to expect the British Government to fight for the interests of Britain in the same way as all other countries in the EU fight for their people’s interests. That Mr Blair signally failed to do. No wonder the President of France wants him to become president of Europe. Clearly Mr Brown was watching in horror while all this was going on. At the time a Treasury official told the press, "““We have ended up giving away much more than we expected and with precious little to show for it in return””." Does anyone doubt that he was expressing his master’s view? One of the then Chancellor’s aides went even further and said that the sell-out—that was his word—would inevitably lead to public spending cuts. The Prime Minister knows well enough what he could have done with the £7 billion that Mr Blair threw away; he could have built 28 new general hospitals every year, employed an extra 220,000 nurses, cut the basic rate of income tax by 2p or cut council tax by nearly 35 per cent. He would not even have had to break faith with the police. But when he could, on first coming into office, have refused to accept the deal and demanded a renegotiation, instead he lamely accepted the deal. He has proved as supine and neglectful of the national interest as his predecessor and now must share with him the responsibility for a shameful as well as a costly business.