John Redwood Speaks on EU Constitution

Not ??a great triumph, but a ??disgraceful sell-out is how John Redwood last night described the Governments forfeiting of the ??10.5billion rebate. Speaking in the Commons debate on the EC Finance Bill, Mr Redwood questioned the Government-generated myths surrounding its EU budget negotiations, explaining how Blair ??completely mishandled them. Mr Redwood also debunked the myth that the budget proposals presented last night would benefit Eastern European member states, since we know that EU spending in those countries had been agreed without sacrificing the UK rebate, and some of it like the rest of EU spending would be wasteful, inefficient, or even vulnerable to fraud. For a Government now unable to afford an agreed pay-rise for the police, and which is borrowing and taxing at record levels, Mr Redwood wondered how it was able to part with such a significant amount of money, let alone dress it up as a success story.

<strong>The speech in full, taken from Hansard, follows. </strong>

<strong>Mr. Redwood:</strong> I shall keep my remarks brief, because once again the Government are not allowing us proper time to deal with the matters before us??clause 1 and the very important new clause 1, which we hope will be moved shortly. However, I cannot let the Chief Secretary get away with the disgraceful arguments that he has produced this evening.

The Chief Secretary first suggested that Mrs. Thatcher used to negotiate and reach compromises, and that that was entirely comparable to the negotiation, sell-out and giveaway that he has again announced to the House. Let us compare the two negotiations. Mrs. Thatcher went to a Community in which the other 11 countries had no interest in letting us keep more of our money. Any one of them could have vetoed her proposal that we should have a rebate. She managed to talk them round from 11-one down to 12-nil in favour, because she had to win by a unanimous vote.

All that the current Government had to do when they went to Brussels was say, ??We have a veto and we are not going to give away what Margaret Thatcher so wisely and brilliantly won for the United Kingdom,?? but they could not even do that. They gave in under pressure and said, ??Oh deary me, no, it would be quite wrong of us to use our veto. Wed love to shell out ??10.5 billion over the first period and much more over subsequent periods, because we now realise that we shouldnt use the veto and were here to give in.?? The Opposition are delighted that the Chief Secretary gave way so much in this debate, but we are unhappy that Mr. Blair and others gave way so much when they completed mishandled the negotiations.

Labour colleagues of the Chief Secretary are present who believe that the sterling equivalent of that ??10.5 billion would be much better spent on public services, which they greatly revere. There are also those on the Conservative Benches, such as me, who believe that, in the light of all the money wasted in public services, that ??10.5 billion should be given back to British taxpayers, who have paid all too dearly for the Governments inefficiency and their bad negotiations in Europe.

The Chief Secretary tells us that we should regard the deal as a negotiating triumph, because although the Government gave away the veto that had been so brilliantly negotiated by a predecessor Prime Minister, they achieved a smaller rate of increase in the budget than the Chief Secretary apparently thinks we achieved 13 years ago. It may be that the Government achieved a smaller rate of increase, but what matters is that the budget increased so much in the early Labour years, after the end of the Tory years, that any increase would be unacceptable. The Chief Secretary cannot get away from the fact that the budget that he is recommending is massively higher than that which was recommended by Mr. Major. For that reason alone I cannot accept it, because it is too big a burden on British taxpayers.

We then heard the myth, which the Government put about, that the proposal is essential for those countries in eastern Europe, which would otherwise be deprived. As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) pointed out, however, enlargement was agreed without the new variant. If we had dug in and used our veto, enlargement would still have happened, but we would not have had to make a disproportionately large contribution to that increased spending in the territories entering through enlargement. Some of the other rich countries of western Europe should also have continued to make a bigger contribution relative to ours, for the reasons that my hon. Friends have already set out.

<strong>Mr. John Hayes (South Holland and The Deepings) (Con): </strong>I hope that right hon. Friend will not ignore the Chief Secretarys other two specious arguments. The first was that the deal could have been worse if the Commission had had its way??a suggestion that represents the last resort of the scoundrel. The other was that any objection to what has been negotiated is somehow improper and that the House should not scrutinise the deal that was done. That is the Vichy argument, which has been used by malevolent or misguided Ministers for years in selling this country short.

<strong>Mr. Redwood: </strong>I am grateful for those extra points. I should like to make some additional ones, to finalise my critique of the Chief Secretarys position.

The Chief Secretary implied that eastern European countries would be short-changed. That is not true. He also assumed that all the EU spending in those countries will be worth while, but as we know, much of it has been shown to be inefficient, wasteful or even fraudulent by the accounts or by the auditors assessment of them. I fear that there will be more such instances in future years. I am sure that the Chief Secretary will be unable to say now that there will be no more such practices, so we may find ourselves financing more unsatisfactory, unnecessary, inefficient or even fraudulent programmes, which my electors are decreasingly in favour of doing.

Finally, the Chief Secretary said that we must understand that we will get more trade for British companies out of enlargement and the greater prosperity of eastern European countries. Of course we will, but that is not contingent on giving away our veto and our budget position. Indeed, I would argue that the main reasons for getting more trade from those countries will apply to non-EU members as well as to EU members. Those reasons are the free trade in the world as a whole, through the general agreement on tariffs and trade, and the fact that some of those eastern European states have wisely decided to set much lower tax rates and create a much more favourable climate for enterprise than this Government are creating for the British companies that have to compete with them.

The Chief Secretary should not suggest that what was negotiated is a great triumph. It was a disgraceful sell-out, and in contrast to the excellent negotiations that my party carried forward when we first won the rebate, it marked an extremely sad day for Britain. Voters of all kinds will know that that goes along with the money wasted on Northern Rock, ID cards and all the other things, as a symbol of what is wrong with this Government.