I hope the hon. Gentleman is able to spread that message far and wide across the Opposition Benches. What he says is true: wherever we have a cost in our finances, we make choices in other places. This is a significant sum, but it is one we have chosen to pay over. We must therefore ensure that we allow ourselves, as this decision on the own resources decision rightly does, to keep a check on how our money is being spent.
The European Union Act 2011 requires this House to give approval to own resources decisions. There has always been an Act of Parliament that does that, but the 2011 Act was a good piece of legislation—again, Labour Members came to it late in the process. It allowed greater scrutiny of how the Executive choose to act in European matters; it introduced the referendum lock on certain things; and it made sure that we get a debate on significant matters such as the one before us today. Although we have always had an Act of Parliament in place to do this, I welcome the greater scrutiny.
I should remind hon. Members of what the “own resources” of the European Union actually means. What are these figures for and where do they come from? Well, 12% of the own resources budget is comprised of customs duties, including those on agricultural products; a tiny sum, less than 1%, is sugar levies; there are contributions based on VAT, which comprises about 13%; and the remaining 74% or so is based on gross national income-based contributions. A significant mix of different things goes into our £14 billion gross contribution to the EU.
Actual European spending is set by the annual EU budget, but, as my hon. Friend the Minister said, the annual budget expenditure is governed by the ceilings set by the EU’s multi-annual financial framework. I was pleased to be reminded by him of the good job our Prime Minister did to ensure that the last MFF gave us an unprecedented real-terms cut in EU spending ceilings for 2014 to 2020, which was welcomed by Members on both sides of the House—it was eventually believed by the then Labour economic team.
Unlike the own resources decision, under EU treaties the multi-annual financial framework does not need the national approval of member states in accordance with their conditional requirements. Thus, it is already in force and this Bill deals only with the own resources decision. Alongside the agreement of the new MFF, we had this new own resources decision, which was formally adopted by unanimity by the Council in May 2014, and the Bill approves it for UK purposes. As the Minister said, the rules governing the UK rebate remain unchanged compared with the existing own resources decision. Alas, they do, however, repeat, and this answers a point mentioned earlier by the hon. Member for Luton South—