On Monday Parliament received the Treasury’s 2012-13 “Convergence Programme for the UK: submitted in line with the Stability and Growth Pact”. It was a timely reminder of more powers surrendered by the previous government.
We were told at the time that the UK would not submit its budget to EU scrutiny or decision prior to the Chancellor delivering his Statement to the Commons. The UK would merely send the EU the Budget Red Book as a matter of record after the Budget.
As so often with EU matters, it is not as simple as that. The government has sent a 235 page document to Brussels about our budget, spending and tax plans, and economic forecasts. Part of this, is a series of extracts from the Budget Red Book and part of it a long extract from the report of the Office of Budget Responsibility.
However, page 5 in the introduction and pages 29-30 on the Excessive Deficit Procedure go further than was suggested at the time of the agreement on the Pact. The introduction explains that the UK has to submit an annual Convergence Programme. The country is under an obligation “to endeavour to avoid an excessive government deficit” under Protocol 15 to the EU Treaties.
The section of the Excessive Deficit Procedure is even more concerning. The UK first accepted this requirement under Labour in 2008. “In November 2009, the Council made recommendations to the UK, including a target to correct its excessive debt by reducing the Treaty deficit below 3% of GDP by 2014-15.”
The new government reports that it “remains committed to bringing the UK’s Treaty deficit in line with the 3% target set out in the Stability and Growth Pact”. This is now planned for 2017-18, delayed from 2014-15.
This filing reveals the absurd paradoxes and contradictions of modern UK politics. Labour who now say we should not cut the deficit so fast or so far signed us up to an EU policy which requires us to cut further and faster to comply with the EU Excessive Deficit Procedure. Conservatives, who think it is right to cut the deficit and get more quickly to the point where debt as a proportion of GDP is falling, do not think the EU should be involved in these UK budget decisions.
It would be interesting to hear on this site from the bloggers who both think the deficit reduction is too fast and who think the UK should be following EU policies faithfully.