Statement from Peter Luff on the EU Budget
News Story

I am absolutely clear that I would like to see real cuts to the EU budget and that is why I have given very serious consideration to voting for the amendment today.

The governmentís policy is to seek cuts to the CAP, to the EUís administration budget and to the recycling of money that happens when the EU gives regional funding to relatively rich countries. The UKís consistent position has been to seek a real terms freeze in the next multi-year EU budget (Multiannual Financial Framework or MFF) because it believes that is the best deal that can actually be delivered for British taxpayers.

The UK can veto this Ė and we will if we donít get a real terms freeze: no deal is better than a bad deal Ė but the government has made a strong case that a veto wonít leave the UK in the best place. If thereís no agreement then ultimately we move to annual budgets, decided by qualified majority voting and jointly with the European Parliament. It can only go up so much but it is likely to cost British taxpayers more than now.

A real terms freeze would still be an unprecedented achievement, the toughest EU budget settlement ever. There has never been a real terms freeze from one MFF to the next before Ė the current one is 8% bigger in real terms than the last. The government will also block any changes to the rebate and any new EU taxes.
It is crucial that Parliament sends the message that there should be no changes to the rebate and no new EU taxes, including an EU-wide Financial Transaction Tax. A crucial weakness of the amendment proposing a real terms cut is that it omits all mention of this issue and could therefore weaken Britainís negotiation position.

Hard economic times across Europe make this a tougher negotiation, but I have been reassured that the UK government is sticking to its guns Ė no more than a real terms freeze or it will use the veto. It is also using the ceiling on the budget to put pressure on things really in need of reform, like the CAP.

Please excuse me a political comment. Labour are being completely opportunistic and hypocritical about this. In Government they signed off bigger EU budgets and gave away £7 billion of our rebate. Their MEPs are calling for more EU spending. Their Socialist Group allies are calling for new EU taxes, abolition of our rebate and a bigger EU budget. Now, suddenly, Labour are allegedly in favour of a smaller EU budget. That has zero credibility.

Iím afraid I donít believe leopards change their spots and I see this as a cynical attempt to undermine the governmentís wider economic efforts to repair the damage done by Labour during their 13 years. This is about the EU budget, but it is also about the lack of credibility of Labour.

Because I believe the freeze is the best deal we can win, and because I will not give Labour the comfort of seeing the government suffer a defeat on an issue they donít really believe in, I will vote with the government. But I repeat, if I thought we could win a real terms cut in the EU budget I would not be doing so. Politics is often about pragmatic reality which is why I know some people find it unattractive. But deals are what have to be done to secure real progress and a deal to freeze the EU budget would be huge progress.

Back to News