European Communities (Finance) Bill

My Lords, I should say at once that I disagree with almost everything the noble Lord has just said, but I will leave it to my noble friend to reply to that. For my part I make it clear that I am a Europhile, but one does not need to be a Eurosceptic to have considerable concerns about the European Union budget. The only thing I could not understand about the noble Lord’s speech was his absolute certainty about what the budget would provide in the years ahead; I wish I could be so certain. I am concerned about the lack of a clear audit certificate on EU budgets for years, but our own all-party European Union Select Committee said, about own resources, that it saw no need for changing it. The committee was, however, concerned about costs and expenditure, although it did not refer to the nonsense of expenditure and waste arising from travelling between Brussels and Strasbourg every month. I wish some of the recent renegotiations might have taken account of that and got some concession for it out of the way. In any large organisation, whether it be one of 27 nation states or even a small country like the United Kingdom, which has comparatively reasonable management of its budget, such an arrangement is bound to be costly—and that would apply with or without the new treaty. The Explanatory Notes to the Bill are interesting on the question of costs. Paragraph 16 tells us, with regard to the financial effects of the Bill, that: "““The calculation of the UK correction shall be adjusted by progressively excluding expenditure allocated to member states which have acceded to the EU””—" not this year, but, "““after 30 April 2004, except for agricultural direct payments””." So, that tells us. Or does it? Paragraph 17 goes on to say: "““The additional UK contribution resulting from the reduction in allocated expenditure is limited to €10.5bn””," not in today’s prices, but ““in 2004 prices””. Then we are told that the European Agricultural Guidance and Guarantee Fund, Guarantee Section, will also have other effects, and: "““This change will be phased in as follows: 20 per cent budgeted in 2009, 70 per cent in 2010, 100 per cent from 2011””—" always assuming we can live that long. That should tell us what the cost will be to us. But does it? Paragraph 18 says: "““The effect of the new decision on the United Kingdom’s net contribution to the Community budget will depend on the total size and pattern of Community expenditure””." Of course it will—but what will that expenditure be? I wondered how I could find out what this is literally costing us as a net contribution to the European Community budget. It seemed a reasonable thing to ask. I got a copy of the April 1997 spending review. This should be simple, I thought; it will tell us immediately what the cost is. In table 6.2 on page 72 we are told that the net expenditure transfer to the EC in 2005-06 was £4.435 billion—the figures were not yet in trillions. Even that is not clear, because that is billions in accrued public spending. Then we are told that the estimated outturn for 2006-07 will be an accrued £4.652 billion. The plans for the following year—that is, the year we are now in—were for £5.01 billion. Now we know. Actually, we do not know, because there is much more in the public expenditure review. In table C.1 on page 189, we are told that the gross GNI contribution—everyone knows what GNI is, of course—is £8.685 billion, this time not in accrued money but still in billions. We are told that there is a UK abatement of £3.675 billion, so we get to the same figure for 2007-08 of £5.01 billion. That, then, is the net contribution. But is it? We are told in the notes on the same page that some of the money is in one particular kind of expenditure and some in another. I declare an interest: I have used all the terms in those notes in my time in preparing budgets, presumably even a European Union budget figure. We are told that there is even one possibility that some of the money is in real cash terms, but then we are told that the TME effect of EU membership is given by GNI-based contributions, less the UK’s abatement—less an amount in respect of the cost of collecting TORs. Of course, we all know what that is—I see the noble Baroness does. It means total managed expenditure, and then by the traditional own resources. Therefore, we now know what the net EC contribution is. I regret to say that we do not because in addition to the pages I have quoted there are another 17 pages of the Comprehensive Spending Review which tell us about our net contribution to the European Community budget. Can my noble friend give an assurance that in future he will present our net cost to the European Community budget in terms that might even please the noble Lord, Lord Waddington. I will not refer to the noble Lord, Lord Pearson. I would not expect him to be pleased about it at all.