More on that Budget: What the increase will be spent on. Me for example

I note that EU Referendum, and Your Freedom have both picked up the point that the European Parliament's rapporteur on the Budget negotiations reckons that the boy Dave is being less than fully honest about the 2.9% budget increase.

Both of them highlight what the extra money will be for.

"On one hand member states are asking us to cut payments for 2011, but on the other they are demanding supplements for 2010," Ms Jedrzejewska said.

Listing the extra expenditures already agreed for next year, she mentioned: compensations for banana producers agreed by EU member states and the World Trade Organisation, which would be worth €80 million; the France-based nuclear fusion project (ITER) project, for which international funding to the tune of €1.5 billion still has to be found; and the new EU diplomatic service which will need at least €34 million extra funds in 2011.

What neither of them notice, because it is not reported in the EU Observer version of the story, but rather the European Voice version is that the money is also going on people like me,

MEPs are also demanding the EU put aside money to pay for a possible retroactive pay rise for EU staff for 2009.

Bet your backbenchers will love that little snippet Dave.

EU Budget: Government's plan to cheat

As we know, Mr Cameron came home from Brussels the other week after his 'spectacular success' in holding down the 2011 EU budget to a 2.91% increase. This was against the concerted opposition of countries like Malta and institutions like the European Parliament.

Now, according to the EUObserver, the Polish MEP responsible for the Parliament's response this worsting has rather put a kibosh on Dave's celebration,

But Ms Jedrzejewska, who is responsible for drafting the Parliament's position on this matter, says that if the Parliament agreed to the 2.9 percent figure, more money would have to be added in "ammended budgets" throughout the course of next year.

"It's not an honest proposal and people who wrote the letter know it will be more in the end. They are just postponing payments," she said.

So that is somebody who knows what is actually going on, describing the British authored letter as 'not honest'.

Well who would have thunk it?
She goes on,

This tactic – already seen this year with no less than 10 amending budgets – increases the lack of transparency of EU accounts, which only leads to more lack of understanding from EU citizens, she argued.

"On one hand member states are asking us to cut payments for 2011, but on the other they are demanding supplements for 2010," Ms Jedrzejewska said.

Cameron is not taking this slur sitting down though,

"It is untrue to suggest we're acting dishonestly," a spokesperson for the UK government told this website.

"This is not about postponing payments and we're not privately planning to agree to further increases to the 2011 budget through amending budgets next year. That's wishful thinking on behalf of MEPs. Any future amending budgets should be about re-prioritising expenditure within these limits, not increasing them," he added.

Yeah right go and tell it to the ECJ

Give and take

Richard North has highlighted something that seems to have been missed in the whole Spending Review, that is what is being cut is not spending, but the unreal expectations created by the profligate promises of the previous Government. As he points out,

There are no cuts. I say again, there are no cuts. What the Cleggerons are talking about is a reduction in the rate of increase in public expenditure as compared with the June budget. This is helpfully summarised here and the source is here.

You will see that the current financial year expenditure is £696.8 billion. By 2014-15, the projected expenditure was to rise to £757.5 billion. Little George is now proposing that this increase is limited £739.8 billion. This now becomes a 17.7 percent "cut", albeit that expenditure is still increasing.

Thus, the language of public expenditure has been redefined. A reduction in the rate of increase is deemed to be a "cut". In fact, by 2014-15, annual expenditure will have increased by £43 billion, up 6.2 percent (not nine, as originally stated). By such sophistry, "cuts" are not actual reductions. They are lower than projected rates of increase.

What he has missed is that the round tatal figure being bandied about by the Treasury over 5 years is £81 billion. A big figure for reducing expectations, but one that has an interesting mirror.

Nigel Farage has just pointed this out,

"Currently Britain is paying £45 million to Brussels as subscriptions to the EU club", he said, "multiply that by 365, then again by 5 and the figure is £82 billion".


"If we were to leave and if we were to continue to reduce spending expectations then we as a nation could clear our deficit in double quick time. This would of course create significant private sector confidence and cause a massive boost to investments and jobs".

Instead of that this Government continues to beggar us by membership of the sclerotic spendthrift European Union, rather than giving this country the freedom to grow."

Of course I have not included the 5.9% increase in EU funding so immorally voted for yesterday in Strasbourg, nor indeed the loss of our rebate, so in reality the figures may become even more stark",

These figures are rough and ball park, true, but they do point to a very serious blind spot at the heart of Treasury thnking. What we sime to have is the Treasury taking money from the taxpayer, whislt giving it it straight to Brussels.

(NB. Some money of course does come back, but only where and how other people want to spend it)

Roll of honour

These are the 42 MPs who voted to reduce the EU budget last night by supporting Douglas carswell's amendment. To do so they went against the advice of their front benches and thus should be congratulated for showing at least a little bit of backbone.

Baker, Steve Con Wycombe
Baron, Mr John Con Basildon and Billericay
Bebb, Guto Con Aberconwy
Bingham, Andrew Con Hign Peak
Binley, Mr Brian High Peak
Blackman, Bob Con Harrow East
Carswell, Mr Douglas Con Clacton
Chope, Mr Christopher Con Christchurch
Clappison, Mr James Con Hertsmere
Cox, Mr Geoffrey Con Torridge and West Devon
Cryer, John Lab Leyton and Wanstead
Davidson, Mr Ian Lab Glasgow South West
Davis, rh Mr David Con Monmouth
de Bois, Nick Con Enfield
Dinenage, Caroline Con Gosport
Dodds, rh Mr Nigel DUP Belfast North
Donaldson, rh Mr Jeffrey M. DUP Lagan valley
Eustice, George Con Camborne and Redruth
Goldsmith, Zac Con Richmond
Halfon, Robert Con Harlow
Heaton-Harris, Chris Con Daventry
Henderson, Gordon Con Sittingbourbe and Sheppy
Hopkins, Kelvin Lab Luton North
Latham, Pauline Con Mid Derbyshire
Lewis, Dr Julian Con New Forest East
Main, Mrs Anne Con St Albans
McCartney, Jason Con Colne valley
McCartney, Karl Con Lincoln
Mosley, Stephen Con City of Chester
Nuttall, Mr David Con Bury North
Percy, Andrew Con Brigg and Goole
Reckless, Mark Con Rochester and Strood
Redwood, rh Mr John Con Wokingham
Reevell, Simon Con Dewsbury
Skinner, Mr Dennis Lab Bolsover
Stephenson, Andrew Con Pendle
Stewart, Bob Con Beckenham
Stuart, Ms Gisela Lab Birmingham Edgebaston
Stuart, Mr Graham Con Beverly and Holderness
Turner, Mr Andrew Con Isle of Wight
Vickers, Martin Con Cleethorpes
Walker, Mr Charles Con Broxborne
Mr Peter Bone Con Wellingborough
Mr Philip Hollobone Con Kettering

That is 5 Labour, 2 DUP and 35 Tories supporting the following

Amendment proposed: (b), leave out from 'the financial year 2011' to end and add
'is concerned at the above-inflation increase being made to Britain's EU budget
contribution; believes that, at a time when the Government is poised to make reductions in public spending elsewhere, it is wrong to increase that contribution; and calls on the Government to reduce Britain's EU budget contribution'. -(Mr. Carswell.)

Amusingly the Minister suggested that to support this amendment would be illegal,

The problem with the amendment is that if we withdrew our money from the EU, under its terms that would be illegal. We cannot support an amendment that would make our action illegal, so we will have to reject it,

This was questioned,

Mr Philip Hollobone (Kettering) (Con): On a point of order, Mr Speaker. My hon. Friend the Minister said that the amendment in the name of my hon. Friend the Member for Clacton (Mr Carswell) would commit the Government to an illegal act. Am I right in saying that any amendment accepted by the House for debate is in order and that it would be quite improper for any amendment to commit Her Majesty's Government to anything illegal? Were not the Minister's remarks a matter of debate rather than a statement of fact?

Mr Speaker: I am very grateful to the hon. Member for Kettering (Mr Hollobone) for his point of order. Certainly, from my reading of amendment (b), I am not aware of any exhortation to illegality. The hon. Gentleman will understand, and the House will appreciate, that it is not for me to become enmeshed in an argument between hon. Members as to the merits or demerits of a particular amendment. What I can say to the hon. Gentleman, whose concern for propriety is unsurpassed in any part of the House, is quite simply that the amendment is not improper. If it were improper, I would not have selected it; it is perfectly proper. On the subject of propriety, therefore, he and others need have no cause whatever for concern. I hope that is helpful to the House.

So the Minister's attempt to stop support for the amendment was dishonest and scaremongering, as even Mr Bercow pointed out.

The breakdown of the members is also interesting as it shows that there are some signs of rebellion amongst the new intake. Those elected for the fisrt time this year are

Baker, Bebb, Bingham, Blackman, du Bois, Dineage, Eustice, Goldsmith, Halfon, Heaton-Harris, Henderson, Latham, McCartney, McCartney, Mosely, Nuttall, Percy, Reckless, Revell, Stephenson, Stewart, Vickers,

22 out of the 35 Tory rebels were elected for the first time this year. And there are others who will feel that they have let down themselves and their constituents but have been put under severe pressure from the whips. A certain member for Bournemouth must fall under this, as to see him in the No lobby on this vote has to be a surprise, particularly on the Baroness's birthday.

Why Ponsonby will kill of Tory rebellion

Mr Arthur Ponsonby was a junior Minister in Ramsay MacDonald's first Labour Government. And it is he rather than the last Labour Government who is to blame for what will happen this evening in the House of Commons, no matter what George Osborne says when queried about the amount of money we are shovelling to Brussels having been bearded about this by David Ruffley (and welcome back David).

I make the observation that the situation is, unfortunately, yet another legacy of the previous Government.

The point is that the Parliament is voting on the EU Budget. There are a couple of amendments, one from Bill Cash is to be supported by the Government, which essentially asks the European Parliament to wind its neck in (fat chance), and another tabled by Douglas Carswell demands a little bit more,

"Line 2, leave out from ‘2011’ to end and add ‘is concerned at the above-inflation increase being made to Britain’s EU budget contribution; believes that, at a time when the Government is poised to make reductions in public spending elsewhere, it is wrong to increase that contribution; and calls on the Government to reduce Britain’s EU budget contribution’."

I congratulate the 35 Tory backbenchers who have signed this amendment, but I fear that though the retributions from the whips may not be sudden, it will occur soon enough, despite Tim Mongomery's pious hopes.

The problem is that this increase is one agreed by our friends over the Channel, and it has been agreed under the rules of the Lisbon Treaty, a Treaty as you might have noticed we have yet to be given our say over through a Referendum.

It is not enough for Osborne or Cameron to blame the Labour Party, he has had the opportunity to revisit the issue and decided not to. It would have been difficult I grant you, and would have wound up our continental friends no end. But the Government in Westminster is a Government that is supposed to reflect the wishes of the people of this country, not those of other countries no matter how ripe their cheese, steaming their bratwursts and tasty their wines.

The problem is that under the Ponsonby Rule with a Treaty in place the Government's hands are tied. If a vote goes against the Treaty (and in this case against a budget increase who's legal base is the Treaty) then it acts as a no confidence motion. The Government falls as it is unable to get the support together to fulfil its Treaty obligations.

Worse still, even if the Government was to lose the vote and the MPs actually picked up their cudgels and voted this ridiculous budget increase down, it wouldn't matter as the money would still be paid.

There is another way of course, and that would be for the Government to support the Carswell amendment. Vote the Budget increase down and repudiate the Ponsonby rule (which is a customary rather than formal rule).

Whilst the increase would still be paid, it would mean the next time he was sitting round a table in Brussels hammering out the next EU budget, or defending our rebate he could turn to the colleagues and point to the vote,
"It will not wash in the UK" he could say.
"Europe has to wind in its ambitions".

The Colleagues would listen, after all, we are more important to them than they are to us. Politically, financially and strategically.

What rebate?

It looks to me that those nice chaps in the European Commission are doing what they can to help Mr Cameron. The reports this morning about the EU's wish to end the remains of Thatcher's famous budget rebate fall into this bracket.

"The British rebate has lost its original justification," Mr Lewandowski told the leading German daily Handelsblatt in an interview published on Monday (6 September). "The structure of the EU budget has changed substantially. Farm subsidies – the main reason for the rebate – have decreased, while the per-capita income of the UK has increased substantially since the 1980s."

Lewandowski seems to have become the Commission's floater of choice what with this and the comment a couple of weeks ago that he was interested in setting up a pan European tax. Of the EU dislikes what remains of the post Blair rebate, and it is amusing that he suggests that they want to spend the money on their 'global ambitions', but, but.

What I can see is happening here is that he is setting up a straw man threat to the UK's budget. The boy Dave and his accolyte Mr Osborne can then say that they are going to the wall to protect the budget.

Then when the Commission backs down on the subject the Government can parade themselves around claiming 'Game set and Match to Britain'.

The headlines will state what a doughty defender of British interests the Coalition Government is, whilst not noticing the continued leaching of power elsewhere.

The EU wants more of your money - but wants to hide the fact

Currently the money that goes from the UK to the EU is pretty visible. It goes in the form of a direct block based upon the relative wealth of the country. There are also subventions from VAT and so on.

But in these times of austerity, with budgets being cut across the public sector, governments are a little embarrased that they are unable to cut the amount being sent to Brussels.

So what to do to silence the critics? Tough job.

So the EU is now floating an idea that will allow them to get their hands on people's cash, whislt simultaneously allowing Governments to pretend that the ampount of money going to Brussels is decreasing. Thus shifting the cost burden to Joe public below the obvious balance sheet.

Thus we have the Budget Commissioner Mr Janusz Lewandowski talking to the FT Duetschsland (and reported by EU Observer)

"If the EU had more of its own revenues, then transfers from national budgets could be reduced. I hear from several capitals, including important ones like Berlin, that they would like to reduce their contribution," he added.

He indicated that possible tax sources for Brussels could include an aviation tax and a financial transaction tax. Mr Lewandowski also has his eye on the money raised from the auctioning of CO2 emissions rights, something due to start in 2013.

The dishonesty is palpable. This money is still gouing to come from the punter, in these cases through increased costs, and it will be less transparent.

Though of course if on the bill for your flight, or on your bank charges there was a line
"Taxes for EU contribution", then maybe it would be at least honest. But that isn't going to happen. The businesses in question, desperate not to upset their regulatory masters would never do anything as honest. (except maybe Ryanair)

Update
Maybe Lewandowski is shooting the breeze

HT @OpenEurope

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"