Why the EU should cut its budgets

This morning’s posting was delayed as I was asked in to the Today programme studio to discuss the high and rising contributions the Uk now has to make to the EU.

The programme highlighted the big increase in the UK’s net contributions to £6.3 billion next year, and correctly drew attention to the loss of rebate which Mr Blair negotiated away.

They invited Mr Macshane to put the case in favour of the new higher sums. He did so on two grounds. Firstly, he claimed there would have been no expansion of the EU without our surrender of rebate. Secondly, he said the spending by the EU was very good, citing an example of a new Polish motorway. Neither of these propositions was a credible response. For every Polish motorway there are dozens of marginal projects and much administrative waste and worse. The new member states would have joined even if the UK had successfully defended the Thatcher rebate.

The truth is we cannot afford the large increase in our net contributions, and need to be pressing for a lower gross contribution. It is not just the money we do not get back that should worry us, but some of the money we do get back where the EU decides what we should spend it on. We need to be masters of our own budget, and capable of weeding out cost and needless expenditure where it rests. Quite a lot of those two categories can be found in EU budgets.

Mr Macshane resisted the temptation to say that our partners would not agree to cuts and to seeking better value for money from this big spend. Had he done so I would have reminded him of two things. Firstly, he and other Labour Ministers and ex Ministers are always telling us they have influence in the EU. There would be no better way to prove this to us doubters, than show we could have more of our way on the budget. Secondly, the EU itsefl wisely tells member states to keep their public deficits to just 3% of National Income. When ours is now four times that level, and many other member states are exceeding their limits, surely the EU must see it needs to help all member states to cut spending by leading the way and cutting its own?

Many of us want the EU to do less and spend less. Now would be a good time to do so. Why do we need a system of overseas aid for relatively rich countries? Why are we paying so much of the bills?

Click here to listen to John’s discussion with Denis MacShane on the Today programme.

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32 Comments

  1. no one
    Posted August 25, 2009 at 11:55 am | Permalink

    Good performance on that middle class bastion of political correctness the Today Programme.

    What with BT giving up hiring grads in the UK, and instead hiring them in India through its Tech Mahindra subsidiary, and then bringing them into the country by the thousand via Inter Company Transfer Visas I don’t think you will have to worry about where the tax is going soon! We will be able to shut up shop on UK businesses; you visited a large BT site recently? Seen the absence of European nationals there? And then of course they will all be permanently resident here in a few years when they become entitled to indefinite leave to remain like their predecessors.

    Interestingly Frank Field is making similar points to you on his blog, maybe time for a cross party state the blooming obvious alliance?

    Sadly I think things are getting so bad we are in danger of becoming the breeding ground for a(an extreme-ed) like figure, I think all of the main parties are so far removed from what the decent hardworking folk of this country can see all around them

    Really think you are doing a great job John, keep it up, you are far and away closest to my own views of any UK politician, perhaps without the raw edge from the up close injustices I probably see more often than you

    So we have handed over our entire IT and telecoms business to India, but the Today programme thinks we maybe in recovery because we are making a little bit of steel for a short while……. give me strength! You can just see none of those jornos have worked in the real world

  2. Steve Cox
    Posted August 25, 2009 at 12:06 pm | Permalink

    Excellent points, John, though I’m not sure that Blair “negotiated” the rebate away so much as simply gave it away as a down payment on his future Presidency.

    With the pound in the dumps again and the Euro riding high, surely we must be one of the poorer nations in the EU again? Isn’t it time not just to ask for Blair’s rebate give-away to be given back (Heaven knows, the French and Germans have been laughing enough at our sorry plight, so they can hardly deny that we are in deep do-do), but also to ask for some substantial additional EU aid to boost our infrastructure and stimulate the economy? How about the EU pay half of the high-speed railway line which Adonis is proposing?

    The only reasons for not asking the EU for help in these straitened times are a) foolish pride, which has always been the case in the past since Maggie handbagged the EU, and b) an belief that we will soon be outside the EU so there is no point in making waves now.

    • Cliff
      Posted August 25, 2009 at 6:30 pm | Permalink

      Does the EUSSR require us to pay our fees in Euros?
      If the pound is down and the Euro high, it must follow that it will cost us more on top of the extra charges imposed from next year.

  3. Steve Tierney
    Posted August 25, 2009 at 12:27 pm | Permalink

    Many of us dont want anything to do with the EU at all.

  4. NickW
    Posted August 25, 2009 at 1:11 pm | Permalink

    The EU should start by producing a full set of audited accounts.
    That they are neither willing nor able to do so is an admission of corruption and incompetence.

    Member States should refuse to pay any more contributions until the accounts are in order. I believe we would be entirely within our rights to do just that, and it would have universal support.

  5. Breaker
    Posted August 25, 2009 at 1:21 pm | Permalink

    Mr Blair negotiated away
    A typo, Mr Redwood? I was under the impression that negotiation ended with a good result for both sides.

    Perhaps, once the Lisbon ConTreaty has been foisted upon us, we shall see who the Presidential candidates are – did Mr Blair look upon surrendering our rebate as the price of his entry into the running?

    Should the Tories be elected next year, might I suggest you withhold any further payments to the EU until the accounts are signed off?

  6. Mike Stallard
    Posted August 25, 2009 at 1:40 pm | Permalink

    Marta Andreasen’s book is well worth a read. In it she shows how a keen, qualified accountant was hounded, bullied (really) and treated like a leper when she tried even the simplest accounting reforms. She was eventually virtually sacked after the Commission, in full panoply and led by the anti corruption Commissioner (Neil Konnoch), summoned her to appear before them.
    Forget trying to clean it up or asking for sense. She did herself: Marta is now a UKIP MEP.
    Lots of people will bang on about this corrupt, wasteful organisation.
    Suffice it to say that a lot of the slackness, corruption (yes) and waste which this awful Labour government has smiled down upon is directly paralleled in the EU – like master, like slave.

  7. Number 6
    Posted August 25, 2009 at 1:47 pm | Permalink

    John, the EU is unreformable, unaccountable and anti-democratic – it is simply Neu Labour tax and spend/social engineering writ large. My question is, why do are the Conservatives still in favour of us remaining under its control?

  8. WitteringsfromWitney
    Posted August 25, 2009 at 1:52 pm | Permalink

    “Many of us want the EU to do less and spend less.”

    John, even more of us want the EU to do – pardon me, edit if you will – bugger-all!

    Just get us out – please!

  9. TCD
    Posted August 25, 2009 at 2:48 pm | Permalink

    Dear John,
    Thank you for alerting us to this interview. It was bbrief, but
    you were excellent.
    A lot of the waste is due to straightforward corruption of course,
    for example the VAT fraud on cap and trade which we don’t need
    in the first place, and claims for land or sheep that do not exist.
    Motorways in Poland are fine, but that is not where you want efficiencies to made of course.
    Tony Blair promised reform of the CAP, but little has changed.
    The accounts have not been signed off for many years.
    The European Parliament still travels to Strasbourg every year
    at large and unnecessary expense.
    There is a lot to be negotiated before Britain should just meekly
    concede an increase in its contribution.

  10. no one
    Posted August 25, 2009 at 2:59 pm | Permalink

    http://news.bbc.co.uk/1/hi/entertainment/8218556.stm

    ever wondered where the licence fee went?

  11. oldrightie
    Posted August 25, 2009 at 3:26 pm | Permalink

    “Why do we need a system of overseas aid for relatively rich countries? Why are we paying so much of the bills?”

    We have to cover Lord Mandleson’s expensive network of clients and friends, so assiduously courted and being courted for the possible future wealth of The UK…….

  12. Tim Bennett
    Posted August 25, 2009 at 3:31 pm | Permalink

    Thank you for highlighting this important issue in the context of the colossal public debt crisis that this country faces over the next few years. It is disgraceful how the supporters of the EU are constantly allowed to avoid justifying the costs that membership imposes on Britain within the mainstream media. I watched the lunchtime news on BBC1 today – not a single mention of this story (what a surprise – how often does anything that reflects badly on the EU get coverage on the BBC ?). Yet the news programme somehow found time for a story on the celebrities that were to take part in this year’s Strictly Come Dancing show !

  13. Alfred T Mahan
    Posted August 25, 2009 at 4:28 pm | Permalink

    I have to say I’m completely mystified as to how a motorway in Poland can be a good use of British taxpayers’ money. I shall now listen to the broadcast to see if we’re given an answer – but I doubt it.

    • alan jutson
      Posted August 25, 2009 at 6:26 pm | Permalink

      Alfred
      Its good for us because it allows them to get to us quicker !!!!!!!!.

      Thus it could put British workers out of a job quicker, which means Gordon can have more control over more unemployed people who may vote for him.

      If you believe this logic then lets pay the EU more money to get more here quicker.

      The opposite could be true, it could mean we could escape Gordons taxes quicker if we wanted to leave (for good) !!!!!

      On a more sensible note:

      John, I had a conversation/discussion with one of our civil service types a number of years ago when on holiday.

      Given that he worked somewhere in Central Government I asked why we did not seem to get any funding for motorways etc (I had just travelled from the Algarve to Spain on an EU funded Motorway)

      His comment: We would get as much as others, but the EU insists that any money given is ring fenced for a particular project, it will not fund anything if the money goes into a central pot, as it could be manipulated elsewhere. Hence we get little money back from the EU because we always want it put in a central pot.

      I can only assume if we applied for EU money, then surely we would do so for a particular project that we had in mind, if this is the case, why not ring fence the money for that project, and get some dosh back ???????

      Reply: I don’t think Whitehall is slow to try to get EU money back. We do not have enough qualifying areas.

    • Emil
      Posted August 25, 2009 at 7:51 pm | Permalink

      I think that if this was the best answer McShane could give the argument has been won.

      Meanwhile the Spanish take everything they can get from the EU and completely ignore the edicts that we drop our trousers and open our cheeks to accept.

  14. Demetrius
    Posted August 25, 2009 at 4:45 pm | Permalink

    Your item implies that to some extent the EU knows what it is doing and why. I fear this is a serious misjudgement. There is no real thought process out there, only a babble of sound, and a printing press.

  15. Robert K, Oxford
    Posted August 25, 2009 at 5:00 pm | Permalink

    I’ve just listened to the Today recording and the speed at which the debate was debased was breathtaking. JR says he thinks the EU is spending to much and unwisely. Mr McShane hears the words “Conservative” “Europe” and “spending” in the same couple of sentences and within moments we get his pavlovian response of “Tory, homophobic, friends in Europe”. Then when pushed he talks about clean water in Bulgaria (or was it Romania) and motorways in Poland. JR points out, with typical courtesy, that maybe the reason the Poles didn’t build their motorways was because they didn’t think it was worth it (loved the comment about anecdotage) and then the interview is over. At no point do we get anything from our elected minister that begins to tackle the issue, nor any indication of any concern about the way our money is being spent.
    Frankly John I don’t know how you can stand debating with these people. I suppose the only consolation is that you wipe the floor with them every time.

    • alan jutson
      Posted August 25, 2009 at 6:30 pm | Permalink

      Robert

      Yes a long debate between John and Alistair Darling would be really interesting.

      What do you think the chances ?????

      • Robert K, Oxford
        Posted August 26, 2009 at 11:02 am | Permalink

        I suspect the chances are zero, sadly, although funnily enough Mr Darling would probably find it better to have a debate with JR than the sort of cross-examination he received from John Humphrys a few months ago when the banking crisis was most prominent in the media (note that I don’t say at its peak). The questioning was so hysterical and ill-informed I almost felt sorry for Mr Darling.

  16. Citizen Responsible
    Posted August 25, 2009 at 5:38 pm | Permalink

    In the short time you had, your points came over as clear and pertinent, as usual.

    Tony Blair gave away the U.K’s rebate with Gordon Brown’s backing, even though he had previously said he would veto any attempt to scrap the rebate. To try to justify this, or perhaps to distract attention from his real reasons, he talked vaguely about CAP reform being part of the deal. Pigs might fly.

  17. Gordon Lewis
    Posted August 25, 2009 at 6:15 pm | Permalink

    The other side of the coin is, has anyone worked out how much money Mrs Thatcher saved the country? I am sure it must be a staggering figure. I would like to know how it compares with Gordon Brown’s legacy of “prudence”.

    If only politicians could as careful spending public money as they are with their own.

    Unfortunately, as quoted on the report on MOD procurement, the figures have lost the power to shock.

  18. Brian Tomkinson
    Posted August 25, 2009 at 7:20 pm | Permalink

    A short skirmish which you won handsomely. The trouble is that we are still having to pay all that money to the anti-democratic EU, so who was the real winner? There is no doubt however that the British people are the real losers.

  19. Jon
    Posted August 25, 2009 at 8:33 pm | Permalink

    “he said the spending by the EU was very good, citing an example of a new Polish motorway.”

    Thats funny, I’m glad for Poland. I’m so happy I’m contributing to it. Maybe I’ll go on a sight seeing tour of Poland and as I pass through customs and declare I’ll say here to inspect my new road being built that I’m part funding, in Poland whilst the UK Gov today cut road and transport projects.

    Quite an announcement from Brown, lets Cut Cut Cut. Could it be his hand was forced through a possible default so had no choice but to do his biggest U Turn since 1999. The market liked it, suppose that means he will get more money to borrow to pay the monthly repayments again.

    Just how close did we come to default for him to make that U Turn.

  20. Jon
    Posted August 25, 2009 at 8:49 pm | Permalink

    Add to that an increase in Equities away from Gilts and has the gravy train run out for UK Gov borrowing hence the Cuts announcement.

  21. Brian E
    Posted August 25, 2009 at 9:31 pm | Permalink

    Ask yourself honestly.
    If you were in an organisation where you had access to unlimited funds and had no-body bothering to audit what you’re up to, would you stop spending?
    The EU has a form of addiction to spending and in my view there’s no cure other than it’s demise.

  22. Peter van Leeuwen
    Posted August 25, 2009 at 9:41 pm | Permalink

    The major cause of the increased UK contribution is the devalued pound sterling, not the 20% reduction in the rebate. The fact that this has been left out of the discussion illustrates its political bias. Also lacking is a fair assessment of how the UK benefits from the the EU’s internal market.
    While the Dutch pay a higher (per capita) net contribution to the EU than the UK, even its conservative MEPs (like Peter van Dalen, member of Cameron’s brainchild the ECR) are honest enough to state that Dutch gains from the internal market far outweigh its net contribution (for every one euro net contribution about a gain of six euros).
    Such honesty is lacking in the UK and in the position this blog takes.
    I cannot imagine the UK being so uncompetitive that it draws no benefit at all from the EU. More likely it is conveniently left out of any discussion.
    When arguing for a leaner EU budget, the UK would find a better listening ear in Europe, if it had a more honest assessment of the EU’s costs and benefits for the UK.

    Reply: The main trade benefits are now guaranteed by international trade rules. Surely you are not suggesting the other EU countries wish to stop trading with us?

    • Robert K, Oxford
      Posted August 26, 2009 at 1:10 pm | Permalink

      Surely our ambition should be to break down all trade barriers globally. Companies based in the UK or China or wherever should be free to trade with whomsoever they wish without the distorting effects of government intervention.

  23. Stuart Fairney
    Posted August 26, 2009 at 4:15 am | Permalink

    There are really only two simple questions in this regard.

    1. Does anyone believe the EU will publish bona fide audited accounts in the coming years given they have not done so in the last decade?

    I think not, I do not believe there is the will to reform.

    2. If not, should we really be giving billions of pounds to such an organisation when we manifestly would not invest in a private company whose accounts did not pass muster?

    Again, I think not, let’s simply trade with corrupt foreigners on an ‘arms-length’ basis, not subsidise them.

  24. APL
    Posted August 26, 2009 at 6:49 am | Permalink

    JR: ” .. the EU should cut its budgets”

    No, the EU should be forced to cut its budget, by the simple measure of withholding the British protection fee.

    Unlike the Mafia, who if you pay the protection money will refrain from destroying your business, the EU even when paid off, still comes into your home and smashes the place up, just to make sure you pay on time next time.

  25. APL
    Posted August 30, 2009 at 12:23 pm | Permalink

    JR: “Click here to listen to John’s discussion with Denis MacShane on the Today programme.”

    Why are we directed to the Conservative home web site, then from there, on to the BBC?

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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