EU budgets and Overseas Aid

I am all in favour of famine relief, and want our country to be generous when other countries face disaster or extreme poverty. I am not in favour of an EU diplomatic service, and do not think Russia, China and India need our overseas aid.

Two of the budgets which are rising over this period of public sector restraint are the EU and Overseas Aid budgets. Over the five years  of this planned government  £41 billion will be spent on contributions to the EU and £39 billion spent on overseas aid, a grand total of £80 billion. The annual figure for the two combined hits £18.9 billion in 2014-15.  The  government plans to borrow an extra £460 billion over period 2010-2015, so these two programmes account for over one sixth of the additional borrowing.

The immediate problem is the EU budget. Many in Brussels and Strasbourg favour a substantial increase in the budget next year, to pay for an expanded Diplomatic service and for new regulators in the financial field placing themselves above the Uk regulators. The UK government’s position is to modestly ask for a standstill budget. Many of the government’s supporters would like it to seek a reduction in the budget, believing more of the EU spending is marginal than the domestic spending that is being cut. Current expansion plans for more powers and more staff should be put on hold.

You would have thought when there are riots on the streets of Paris over domestic spending cuts, trouble on the streets of Greece over their big cuts, unhappiness over the  budget cuts in Dublin, Lisbon and Madrid, now would be a good time for the governments of the EU to call a halt to the ever upwards climb of the EU’s budget and responsibilities. Surely others can see what we can see – total spending is too high, and EU spending is less important than many parts of domestic spending?

EU officials are busy lecturing the member states on the need for them to rein in their budget deficits and get them back  down to 3% of National Income or less. Why then doesn’t the EU show them by example how to do it? The EU should be offering us all a rebate or a reduciton in our contributions. It is a sobering thought that all the contributions to next year’s  EU budget are being borrowed, as every member state is borrowing to keep itself going. If the EU is serious about curbing the debts, it needs to curb itself.

I want the Uk government  to up the pressure on other member states to bring this wayward budget under control. Now is the time to win some influence and bring the EU to a more commonsense answer to their budget conundrum.

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34 Comments

  1. P H
    Posted October 24, 2010 at 7:01 am | Permalink

    The more the EU is starved of money the less damage it is likely to do to Europe. So there is a double benefit in cutting off its blood supply.

    But Is it likely that Cast Iron Dave will actually do it?

  2. Norman
    Posted October 24, 2010 at 7:16 am | Permalink

    Those of us who feel we have given too many powers to the EU are always told that it's better to be on the inside looking out than vice versa, that we need to have a prominent seat at the table, etc.

    Now's the time to put that theory to the test.

    Let's see exactly how much influence our billions have managed to buy for us. My guess? None. We'll see a little bit of posturing from the government but it will come to nought.

  3. Alberto
    Posted October 24, 2010 at 7:27 am | Permalink

    I remember Digby Jones talking about foreign aid and how some countries give money to local business to go abroad and build schools, houses or what have you. I think that it would certainly be better to sent British companies abroad to do these jobs, rather than having other countries recruit French or German businesses.

    It might even please some of the tedious Keynesians who have been moaning about "money being taken out of the economy".

  4. Stuart Fairney
    Posted October 24, 2010 at 8:28 am | Permalink

    Isn't the central and only legitimate purpose of government to achieve what cannot be achieved individually. This national defence (we can't all have an RAF each), law & order (there has to be an impartial set of property right enforcement measures etc.

    But foreign aid? If you want to give money to a foreign country, do. If not, don't. This is the ultimate 100% democratic solution where everyone gets their own will be done.

    It's only those who would cajole and ultimately force the behaviour of others who support international aid, so all socialists and alll to many alleged conservatives. Close the book today.

  5. nick
    Posted October 24, 2010 at 9:47 am | Permalink

    You're in power. You can do something about it, and solve other problems too.

    1. Any organisation receiving UK taxpayer's money is subject to UK FOI laws.
    2. Not complying with FOI requests is made a criminal offence.
    3. Any organisation receiving UK taxpayer's money has to produce a satisfactory Audit or funding is stopped.
    4. Fraud where UK taxpayer's money is a criminal offence no matter where in the world the fraud takes place.
    5. Penal rates of fines for organisations, with money going to lawyers that prosecute and win. ie. No-win, no fee, class actions allowed.

    All perfectly reasonable. All implementable under UK law and subsidiarity laws.

    Problem solved.

    EU has to produce its audit. If it doesn't, its a crime. EU arrest warrant, and van Rompey et al are in jail until he coughs up the audit. It's illegal to hand over money to the EU, until they sort it out.

  6. Richard1
    Posted October 24, 2010 at 10:26 am | Permalink

    This is excellent news – an opportunity for Messrs Cameron, Osborne & Hague to attack the EU bureaucrats + federalists. Messrs Balls and Milliband on the other hand ought to be in favour of the increased EU spending due to its Keynesian demand-boosting effect, just as they appear to favour relentless increased spending in every other sphere & urge other countries to do the same. A fight on this is just what we need!

  7. CDR
    Posted October 24, 2010 at 10:48 am | Permalink

    Brussels has the bit between its teeth now; it has powers, it has authority and it is all set now to do exactly as it darn well pleases, without caring about what the rest of us think. You could see all this building up over the past few years. I read today, with churning stomach, that almost half of our beautiful forests are to be sold off to raise money; heaven knows what will happen to them; and yet despite our debt we hand ever more money to Europe. I tremble as to what might come next.

    • simon
      Posted October 24, 2010 at 7:19 pm | Permalink

      This is just another aristocracy land grab isn't it ?

      The opportunity to grab all of this is too much for the elite to resist – and at market bottom prices too .

      Flogging off the family silver appeals to the ideological traits of the worst Conservatives .

      The unwritten British Constitution has proved to be too weak to keep traitors in check and prevent us being taken over by foreign powers .

      Our MP's are not fit to be trustees of our childrens inheritence . No doubt these forests will all be fenced off so the public can't roam on them .

      After taking away everything that the man in the street owns they now want to take away everything they can enjoy without owning .

  8. Bill
    Posted October 24, 2010 at 10:51 am | Permalink

    Too many nations are net recipients.

    France – I think – is about neutral in EU contributions. Germany’s net contribution should be viewed through the advantage of its huge exports.

    Here the Conservatives -regard the EU as a taboo subject – no votes in it.

    One day the tide may turn against the EU – but it will come in its own time I think.

  9. Alan Jutson
    Posted October 24, 2010 at 11:29 am | Permalink

    Why just ask for the Budget just to remain as is, why not actually seek a reduction !

    Any chance that those who are pro EU in the Coalition may at last be be seeing the light and smelling the coffee.

    How many years now have the Accounts failed to satisfy the Auditors, is it 14 or 15.

    Simple statement is needed.
    NO MORE MONEY UNTIL ALL ACCOUNTS ARE VERIFIED.
    Then renegotiate our Terms.

  10. John Bracewell
    Posted October 24, 2010 at 11:31 am | Permalink

    I agree. To inflict spending cuts on your own people and at the same time, give money away internationally as Aid or to the expensive, non-audited, wasteful EU is total nonsense. The government spokespersons go on about taking the people with them in this difficult time but the public will raise 2 fingers to this government if they carry on supporting the EU.

  11. GJWyatt
    Posted October 24, 2010 at 12:00 pm | Permalink

    It's a ratchet.
    It's a racket.

  12. Cliff.
    Posted October 24, 2010 at 12:23 pm | Permalink

    I could imagine the answer my bank manager would give me if I presented him with the following proposal;

    Hello, I am maxed out on my cards and have huge loans, I spend far more than I earn but, I would like to increase my borrowings by one sixth, so that I can give that money to charity and pay my gentleman's club membership fees.

    Then again, I live in the real world!!

  13. APL
    Posted October 24, 2010 at 12:31 pm | Permalink

    JR: "I want the Uk government to up the pressure on other member states to bring this wayward budget under control."

    Bring some of your much vaunted 'influence' to bear on the Europhile leader of your party. Let's see just how effective it really is?

  14. Conrad Jones (Cheam)
    Posted October 24, 2010 at 1:22 pm | Permalink

    Mr Redwood,
    If we cannot manage our own finances and the UK Debt is so bad – which the Government repeatedly says it is; then how can we possibly justify borrowing (because after all – there is no money left) yet more money and then giving this away to a foreign Countries because they cannot manage their economy either. Some Countries who suffer from Famine have been lent money by the World Bank to fund bogus White Elephant projects which outside private contractors benefit from. Conditions are placed on them to create stock markets where all their public utilities (like Water Treatment) are then sold on the World Market. The Private buyers of these essential utilities are interested in Profit and so Water Costs go up and women and children suffer as they still have to travel miles for water in untreated streams and rivers. We should help these people by tackling the route causes of why their economies are so corrupt and bankrupt – not just throw money at them; money that I'm sure you are aware we do not have.

  15. Conrad Jones (Cheam)
    Posted October 24, 2010 at 1:22 pm | Permalink

    Another cause is the UKs interests in Arms Deals to some of these Countries where huge profits are made. The payments of these deals have been Gauranteed by the UK Taxpayer – when Labour was in Government. Ask Vince Cable – he campaigned against such Garauntees.

  16. Robert Eve
    Posted October 24, 2010 at 1:36 pm | Permalink

    Spot on again John.

  17. forthurst
    Posted October 24, 2010 at 3:09 pm | Permalink

    How do we riot in the streets of Brussels or Strasbourg; we don't live there. Brussels is unaccountable, undemocratic and is trying to create a coup d'etat by a stealthfully applied ratchet. I'm afraid that unless the Conservative party stops trying to operate as an ineffective brakeman against the onward drive of those who have been working assiduously for the last 75 years, at least, to destroy nationalities by immigration and nations by incorporation in a Eurasian megastate, and starts to visit their ruthlessness, not against their loyal and patriotic supporters but against the enemy within, this country with all its past, and the future that might have been, will be lost.

    • SJB
      Posted October 24, 2010 at 9:57 pm | Permalink

      The democratically elected (in 2009) European Parliament voted for the budget increase. In that 2009 election, only 34.7% of the UK electorate could be bothered to spend 15 minutes or so to go down to the polling booth. Of those that managed to get out of their armchairs only one in four chose anti-EU parties.

  18. Mr Ecks
    Posted October 24, 2010 at 3:17 pm | Permalink

    The EU owns Cameron –he isn't going to do a thing except give them whatever they want and deceitfully pretend he can "block" their demands. He can't under the Lisbon terms and he doesn't want to anyway, All he is doing is kicking up a little cosmetic dust to cover his real intent. Also, if you are talking to the leaders of your party anytime soon Mr Redwood you might tell them to STOP increasing our energy bills to pander to eco-(enthusiasts) and the entire, (questionable)carbon-trading" crew.

    Ta very much.

  19. Derek Buxton
    Posted October 24, 2010 at 4:11 pm | Permalink

    "The UK government to bring the EU budget under control", a laudable aim. I also have this very nice bridge for sale, velly cheap!. Cameron has no intention of even trying, it's a done deal. Please, will you not realise that he is not in the business of looking after our interests but those of the EU, that is his sole aim. He is already in line to talk to the French President about joining the two armed forces to become an EU force. That is a disaster that should not even be contemplated, but it will be.

  20. Johnny
    Posted October 24, 2010 at 4:57 pm | Permalink

    If Elected Members of European Democracies can bring in Austerity Budgets with few rises and mostly cuts, why not the Un Elected European Uniion?

    The complete lack of Public Accountability and lack of approved annual accounts makes these EU demands "theft" from the citizens who live here. It must end.

  21. Iain
    Posted October 24, 2010 at 5:11 pm | Permalink

    You didn't actually say whether you were for structural aid or not, Are you? If you are then you are for welfare, for that is all structural Aid is, welfare on an international scale.

    The west has been trying the Aid policy for half a centaury and ploughed in some $2trillion, yet what has it achieved? The countries in need of Aid then are pretty much the same countries in need of Aid now, they just need more of it now. By any measure that is a policy failure!

    An economist looked at Aid and found that if Zambia had invested the money they reviewed in Aid their economy would have seen a four fold per capita rise, unfortunately it was spent as Aid and their per capita income fell.

    Ivory Coast in 1997 received 1,270 times more capital aid than India, despite an appalling record of incompetence and corruption. It has twice created lavish new capitals. Between 1979 -94 income of average Ivorians halved!

    Basing GDP per capita at 100 in 1980, by 2004 Sierra Leone's has halved to 50, South Korea's has risen 4 fold to 400. No guessing needed to see which received the Aid

  22. Iain
    Posted October 24, 2010 at 5:12 pm | Permalink

    part 2
    So Aid doesn’t work economically, but neither does it sustain democratic values either. Aid actually undermines the accountability people have with their Governments, for when half of some of these Governments budgets are funded through Aid, we have by doing this removed the sense of ownership these people have with their Governments, for tax is a key way people have of holding their Governments to account. After all there is nothing that gets an electorate motivated than when a Government wastes their tax money, but who cares when its someone else’s. Worse Aid is top down money, so this gives the ruling classes the means to favour their supporters.

  23. Iain
    Posted October 24, 2010 at 5:12 pm | Permalink

    Part3
    Aid apart from being bad for democracies, also shows there is latent racism with in the liberal establishments of the west. In this India is a good example. India is a democracy, its electorate have decided their priorities, amongst it is a space program, nuclear arms program, and aircraft carriers. But for the Indian people to have decided their priorities wasn’t good enough for our metropolitan liberals, no they have decided they know better and waded in with our tax money, £825 million of it. What right did they have to do that? They had none, but what it showed was a lack of respect they had for the Indian electorate.

  24. Iain
    Posted October 24, 2010 at 5:13 pm | Permalink

    Part4

    And finnally relief Aid, is it such a good thing? In the 1970’s the West waded in with massive Aid programs in the Sahel. Aid reached a level of $400 per person . The place was lousy with Aid missions. Yet roll on 30 years and we have the chance to do it all over again, but this time the likes of Niger has a population of 15 million, rather than the 5 million it had in the 70’s., The fact is it is no good wading in with Aid wearing our bleeding hearts on our sleeves, if the need for relief Aid is the result of an unsustainable cultural values and systems that have led to the problems in the first place, because all we would have achieve is to apply a rather expensive bit of sticking plaster to a problem that is only going to get worse. And please don’t give us all this rubbish about global warming in an attempt to put the west on another guilt trip now that the colonial guilt trip is wearing a bit thin, for many of these relief aid needs have over population at their root cause, and all relief Aid will do is to ensure there is an even bigger problem later.

  25. conrad143
    Posted October 24, 2010 at 5:43 pm | Permalink

    "I am not in favour of an EU diplomatic service, and do not think Russia, China and India need our overseas aid."
    Assuming that the World is a simple place and that Aid is offered to help one's neighbour in times of strife, obviously China and India do not need any aid. Russia does not need any help from us either so what's going on? Russia controls those Gas pipelines feeding Europe with a large proportion of it's energy needs. So if we deny Aid to Russia – they could squeeze that pipeline shut – couldn't they? India buys weapons from the UK don't they? So it could be – 'No Aid' – 'No Arms Deal'. The truth of the matter is that so called "Aid" to foreign countries has got absolutely nothing to do with helping people in those Countries and is more to do with increasing profits for private UK and US Firms.

  26. conrad143
    Posted October 24, 2010 at 5:43 pm | Permalink

    Or is just provided to keep the Gas Pipelines open. I'm sure that a small proportion of this "Aid" get's through, just enough for us to legally say that people have benfitted, As to China – well; if they asked for a quick loan – or "Aid" and we said NO, they may very well start dumping trillions of dollars on the World Currency Markets – bye bye America.

  27. WneyitteringsfromWit
    Posted October 24, 2010 at 5:58 pm | Permalink

    "I want the Uk government to up the pressure on other member states to bring this wayward budget under control. Now is the time to win some influence and bring the EU to a more commonsense answer to their budget conundrum."

    Known as one who speaks his mind, I trust you will forgive me when I say I am extremely disappointed in the comment above – especially from you, as you appear not to appreciate the real situation regarding the EU budget where the EU Parliament has the final say. As Richard North explained:

    "Basically, what happens is that the Council looks at the proposed budget and agrees a "common position". This is Cameron's first hurdle. If he wants to block the budget, then he has to get a majority on the Council under the QMV procedures.

    Supposing by some miracle he get his majority … not that he will … the next move is up to the EU parliament. The Council decision is put to the parliament, which decides whether to agree with it. If not – which would be the case – it draws up amendments and forwards them to the Council.

    A conciliation committee is then formed to hammer out a joint text. This must be approved by the committee, the Council component by QMV, the parliament by a majority. But then comes the killer:

    If the European Parliament approves the joint text whilst the Council rejects it, the European Parliament may, within fourteen days from the date of the rejection by the Council and acting by a majority of its component members and three-fifths of the votes cast, decide to confirm all or some of the amendments referred to in paragraph 4(c). Where a European Parliament amendment is not confirmed, the position agreed in the Conciliation Committee on the budget heading which is the subject of the amendment shall be retained. The budget shall be deemed to be definitively adopted on this basis.

    In other words, if the conciliation committee comprising the parliament and the council (the latter acting under QMV) agree the budget, even if the full council then rejects it, the parliament's vote is decisive. It can still approve the budget, without the approval of the 27 member states – of which the UK is but one.

    Basically, the power has shifted to the EU parliament, through the Lisbon treaty … the one Cameron wouldn't give us a referendum on. It is very difficult for the Council to block the budget. As for any member state, without a supporting majority on the council, and again on the conciliation committee, that cannot be done. So, without the support of the other member states, there is nothing Cameron can do."

    It is also disappointing that there is not one word in your post about withdrawal from the EU, which as a 'suppposed' Eurosceptic I would have expected you to do.

    • Peter T
      Posted October 24, 2010 at 8:31 pm | Permalink

      I take your point. What you appear to me to be saying is that because of the bureaucracy and undemocratic, convoluted mechanisms of the EU and QMV our government can do nothing. I concur in part. We can and we should take direct action. our Government can hold a referrendum regarding our continued membership of the EU. Such a threat by itself may well cause this rotten edifice to collapse as they must be aware that they cannot bully us as they did Ireland. We are proud land with a proud history. Let's do it.

  28. Iain Gill
    Posted October 24, 2010 at 6:25 pm | Permalink

    You know john if you just came out and said you didnt like the way the (overseas company-ed) outsourcing movement operated, protested at the (large ) numbers of intra company transfer visas issued to (overseas employees) with the same skills as folk out of work with british passports, protested at the large numbers of (foreign) nationals given indefinte leave to remain simply for working here a while, protested at the large number of foreign national children given fee schooling here simply because their parents are in the country on a workvisa, protested at the large numbers of family members of work visa holders at the highest end of the NHS use scale, protested at the large tax dispensations given to non EC work visa holders in this country, protested at the way multinationals can operate in this country but pay most of the tax on UK earning in another lower tax country, protested at the widespread leakage of UK IP to other countries, protested at the more extreme silly anti pollution controls which are out of line with our competitors

    then if you won the day and got all your views implemented as party policy you would have a party which would win every election !

    i agree with everything you said in this post

  29. English Pensioner
    Posted October 24, 2010 at 8:03 pm | Permalink

    I think that we should apply a number of rules to giving aid
    1. No aid to countries which spend a higher percentage of their income on armaments than the UK
    2, No cash should be given as aid, only goods or services.
    3. Wherever possible any goods should be manufactured in the UK, and services provided by UK companies, thus simultaneously helping our own economy.

    Much as I would like to help the poorer countries, I was always taught that "Charity begins at home", and our first objective must be to ensure the safety of this country and its inhabitants. When I read in today's Sunday Mail that the £3billion in extra aid would have kept the Harriers flying for 20 years, I just wonder if we will ever get a government that puts this country first (like the French do), as unless this country is safe, we could end up in a position where we are unable to give any aid.

  30. TheESSEXGIRLS
    Posted October 25, 2010 at 11:24 am | Permalink

    Guido Fawkes/Paul Staines draws much flak but his leader today is worth reproducing here as we too tire of much of the pandering being demonstrated:

    "Guido questions how we can move forward without, in aggregate, the lowest decile losing out.
    The lowest income decile in this country is comprised largely of welfare transfer recipients, these people receive money largely from the working poor and the squeezed middle, quite simply that decile’s welfare payments come from the taxes of the rest of us. The only way that reforms can be made to fit the “progressive” template that would please the progressive choir would be to pay the unemployed more money taken from the working poor and the squeezed middle. That might be “progressive” but it won’t lead to progress.
    It is in no one’s interest to increase the poverty trap by increasing the payments to those who aren’t working at the expense of those who are working. It isn’t progressive, it is divisive."

  31. Alan Wheatley
    Posted October 25, 2010 at 4:41 pm | Permalink

    As to the EU, it has so far proved to be a one-way street, so I live in hope but not expectation.

  • About John Redwood


    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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