Wednesday, July 28, 2010

Is our Tithe to Europe exempt from austerity measures?

Lord Vinson asked a question along these lines, the answer he gets back is interesting.,
To ask Her Majesty's Government whether they intend to make a proportional cut to the United Kingdom's European Union net contribution of approximately £7 billion a year as part of the overall reduction in government spending.
So far so clear. The answer however seems to want to be all things to all people,
The Commercial Secretary to the Treasury (Lord Sassoon): At a time of fiscal consolidation across many EU member states, the Government believe it is only fair the EU budget plays its part.
In 2005 the previous Government agreed to rising UK contributions to the EU budget over the period 2007-13. But to reflect today's realities we have repeatedly called for a freeze in the EU budget next year.
The Commission's initial proposal for the EU budget for the period 2014-20 is expected early next year. The Government expect the Commission's proposal to take account of fiscal consolidation efforts across member states. At the negotiation of the next EU budget, the Government will strongly defend the UK's national interests, and ensure the budget is focused on those areas where the EU adds value

So yes, the amount of money we send to Europe should be cut in line with the cuts across the UK public sector.

But, and here's the rub, what the Government has done is appealed to Brussels to recognise the situation. No more. Of course the reason why is simple, they have no power to set the amount. Brussels will set a tithe at the level that Brussels thinks it can get away with. No amount of 'expecting' is going to do it. Hard core negotiations with red lines in permanent marker might just. But there is no sign that this government, just like the last will apply such penmanship.

The only bright spot is if the amount is calculated in Euros, with the weakness of the Euro then the amount posted to Brussels will drop in real terms, but only if the pound goes higher. Possible of course but with downsides for our exporters.

So the real answer to Lord Vinson should be,
"We hope so, fingers crossed"


Budgie said...

I would be really interested to know where the government thinks "the EU adds value". And what figures the government can show to support their belief.


"the government will vigourously defend the national interest"well that will be a first,why start now?

Gillibrand said...

" ensure the budget is focused on those areas where the EU adds value"

Think they need to specify where they think these areas are. So they do admit they are funding areas presently in which the EU gives no added value?