Britain's sold-out Rebate

A Tory front bench spokesman put on a sparkling performance in the Commons yesterday, no it was not George Osborne taking aim at the sitting lame duck Chancellor but rather the Shadow Chief Secretary to the Treasury, Philip Hammond. His entire speech is worth reading from Hansard, linked here, but I will quote this section with a particularly acccurate intervention which I have put in bold: Mr. Hammond:......... To return to the result from Brussels, the limit on the cost to the UK of the reduced rebate will end in 2013. Failure to reach agreement on a budget for the period after 2013 would have a devastating effect on the UK contribution, because the rebate reduction would become uncapped. We would have no effective veto, and thus no negotiating power, during negotiations on the EU budget for the period from 2013—and our partners in Europe would know it. There is one further twist to the tale. The Prime Minister, when he was Chancellor of the Exchequer, put it about that he was against the deal. When it was announced, the Treasury pointedly refused to endorse it and denied all responsibility, because it was worried that the deal would force future spending cuts. According to the Treasury briefing, the current Prime Minister was “quietly fuming”. What did he do? This April, it became known that having failed to claw back some of the rebate through negotiation, he too had caved in and agreed to accept the original deal—the deal that he had previously condemned. So much for his powers of persuasion on the international stage. That is the sorry tale behind the Bill, although, of course, that could never be discerned from reading it. We, the Parliament of the United Kingdom, whose responsibility is to our electorate and our UK taxpayers, are invited to give the Bill a Second Reading, thus giving effect to what was done—in our name, but in complete contradiction of everything promised to us in this House—at Brussels in December 2005. If we do so, by 2010 the UK taxpayer will be footing the bill for an extra £1.9 billion a year—a sum roughly equivalent, fittingly enough, to the total Foreign Office budget—as a result of the sell-out on the rebate. That is in addition to the increase in the UK contribution to the underlying budget—£1.5 billion a year on average for the period 2007 to 2013—to deal with the cost of enlargement. Taking into account the loss of the UK rebate, which will increase our share of total EU costs, and the 19 Nov 2007 : Column 1001 growth in the budget during that period, the UK’s net contribution will more than double, from £2.8 billion a year on average under the previous financial perspective to an estimated £7.3 billion in 2013. Mr. Baron: May I tempt my hon. Friend to speculate about why we caved in on the rebate? Given that it was non-negotiable and that there has been no meaningful reform of the common agricultural policy, does he think that there is a connection between our sudden cave-in and the recent statement by the French that they thought Tony Blair would make an excellent President of the EU? Mr. Hammond: That is an extraordinarily interesting piece of speculation better made from the Back Benches than from the Dispatch Box. I leave my right hon. and hon. Friends to draw their own conclusions. The choice before the House when the Question is put this evening will be whether to endorse or reject the sell-out of the British rebate. It is not about the overall EU budget or the financing of enlargement, which the Government have tried to spin; it is about the division of the total budget cost into individual contributions. It is about whether we are prepared to throw away the hard-won victory of 1984.