Britain calls for a cut in EU budget, warns on veto
British Prime Minister David Cameron.(AFP Photo / Leon Neal)
“We want a cut in the EU budget,” Chancellor of the Exchequer George Osborne told BBC Radio 4. “We will not accept a deal unless it is good for the British taxpayer. We will veto any deal that is not good for the British taxpayer.”
Osborne also stressed that a eurosceptic mood is on the rise in the UK as taxpayers are rebelling against increasing spending in Brussels. “Britain has become more eurosceptic over my lifetime. I think people are outraged when they see money being wasted in Europe,” he said.
Meanwhile UK Prime Minister David Cameron has insisted he will veto any increase in the European Union’s budget as he prepares for budget talks at the EU summit in Brussels on 22-23 November.
“This government is taking the toughest line in these budget negotiations of any government since we joined the European Union,” Cameron told the Commons at his weekly question-and-answer session. “At best we would like it cut, at worst frozen and I am quite prepared to use the veto if we don’t get a deal that’s good for Britain.”
Wednesday Conservatives teamed up with the opposition Labour Party to pressure the Government about the EU budget. The MPs voted 307 to 294 last night in favor of an amendment, though not binding for the government, which calls for a real cut in the bloc’s spending between 2014 and 2020.
The European Commission has already proposed savings 1.03 trillion euros for the years 2014 through 2020, an increase of almost 6 % compared to the 2007- 2013 budget.
The UK is one of 12 EU members which make a net contribution to the EU budget. It means that it pays in more than it gets back in EU funding. The country’s net contribution to the EU budget in 2011 was 10.6 billion euro, according to Treasury. But the European Commission says the UK’s net contribution was 7.25 billion euro.
It’s not the first time Tories have shown their eurosceptic attitude. Last year 81 Tory lawmakers called for a referendum on Britain’s membership of the 27-nation EU.
David Cameron suffers stinging defeat over EU budget
David Cameron suffered a stinging Commons defeat over Europe as Conservative backbenchers told him he must deliver real reductions in the European Union budget.
The defeat came after more than 50 Conservative rebels were joined by Labour MPs in supporting a demand for real-terms reductions in spending by Brussels.
The Government was defeated by 307 votes to 294, a majority of 13. Commons sources estimated that 51 Tories voted against the Government, with two more acting as tellers.
The vote was Mr Cameron’s second major Commons defeat over Europe and led to warnings that division in the Conservative Party over Europe could hamstring him as it did Sir John Major during the 1990s.
The vote is not binding, but will put Mr Cameron under intense pressure to take a harder line in talks on the EU budget at a summit in Brussels later this month.
Mr Cameron had already promised to veto any significant rise in EU spending and Downing Street last night promised to “take note” of the vote in the coming budget negotiations.
Some Conservative MPs said the vote could strengthen Mr Cameron’s hand in the budget talks, but aides fear the result could create a significant political problem for Mr Cameron.
Government sources insist that it is effectively impossible for Mr Cameron to deliver a cut in EU spending because so many other members want an increase.
Yet any budget deal that falls short of the cuts demanded by the House of Commons could leave Mr Cameron facing a backlash from MPs and the public.
Peter Bone, a Conservative rebel, said many MPs had defied the Government because their constituents will not accept a rise in EU spending.
“Parliament spoke for the people,” Mr Bone said. “It was a very significant victory for the people.”
Ed Balls, the Labour Shadow Chancellor described the vote as “humiliating” for Mr Cameron.
Senior Tories responded by accusing Labour of taking an “opportunistic and hypocritical” position on the budget because of the last government’s record on EU spending.
EU leaders are trying to decide on a budget for 2014 to 2020. The European Commission and several EU countries are calling for an increase in spending.
Mr Cameron has said he wants EU spending to rise in line with inflation, a real-terms freeze. Conservative critics say that would still cost British taxpayers billions of pounds, arguing that at a time of domestic austerity, EU spending should also be cut.
Before the vote, the Prime Minister tried to placate his party by insisting that he too wanted a cut and promising a hard line at the summit.
“At best we would like it cut, at worst frozen, and I’m quite prepared to use the veto if we don’t get a deal which is good for Britain,” he said.
“But let’s be clear – it is in our interest to try to get a deal because a seven-year freeze would keep our bills down compared to annual budgets.”
Mark Reckless, one of the leaders of the Conservative rebellion, told MPs that Mr Cameron’s plan would increase the UK’s net contribution to the EU from £9.2 billion last year to £13.6 billion in 2020.
“We simply cannot, cannot afford that,” he said.
Mark Pritchard, another rebel leader, said money sent the EU should be spend in the UK instead.
He said: “Are we going to continue to ask families up and down this country to stop putting new shoes on their children’s feet while we fill the very large Mercedes fleet of Brussels?”
No 10 said that Mr Cameron was taking the toughest stance of any EU leader on the budget, but ministers admitted that even his starting position for the talks – inflationary rises in spending – would cost Britons more money.
Greg Clark, the City minister, told MPs: “It is true that the increase we are talking about would involve further contributions.”
Tony Baldry, a senior Tory backbencher who backed the Government, accused the rebels of “self-indulgence” that could take the party back to the internal conflict that undermined Sir John Major’s government.
He said: “If this party hopes to be in government after the next general election, it has just got to get a grip and start supporting the Prime Minister.”
Ed Miliband, the Labour leader, likened Mr Cameron to Sir John, his authority undermined by Tory dissent over Europe.
“He can’t convince European leaders, he can’t even convince his own backbenchers,” Mr Miliband said. “He is weak abroad, he is weak at home: It’s John Major all over again.”
Videos and more at the link:
Tory Euro rebels warned they are damaging David Cameron’s hopes of re-election as Nick Clegg says there is ‘no hope’ of EU budget cut
- Government loses crunch vote by 307 votes to 294 as Commons demands a real terms cut in funding for Brussels
- Nick Clegg says there is ‘absolutely no chance’ of persuading all 26 states for a real-terms cut
- George Osborne says he understands the ‘frustration’ of backbenchers
- Rebels say they have spoken for the people but loyalists warn Tory hopes of re-election have been damaged by the revolt
The coalition risked descending into political infighting today, after David Cameron suffered his first significant Commons defeat at the hands of Labour and Tory rebels demanding a tougher stance on the EU’s budget.
Tory rebels claimed they had defied the Prime Minister to vote for the British people, while loyalists warned Conservatives must ‘get a grip’ and support Mr Cameron or face defeat at the 20-15 general election.
Chancellor George Osborne refused to say a real-terms reduction in Brussels spending was impossible but Deputy Prime Minister Nick Clegg warned those demanding a cut had ‘absolutely no hope’ of achieving their goal.
David Cameron and Ed Miliband clashed over the government’s stance on the EU budget at Prime Minister’s Questions in the Commons today
Announcement: Commons Speaker reads the result in the House of Commons last night. MPs voted for a cut by 307 votes to 294
Result: The result is announced to the House as MPs watch on
Mr Cameron will go to next month’s European Council summit calling for a real terms freeze in the EU’s seven-year budget.
But MPs instead backed a call for a cut by 307 votes to 294.
Mr Cameron has faced repeated comparisons to John Major, whose premiership was dominated by Tory splits over Europe and endless debates on the Maastricht Treaty which eroded his authority.
Tory MP Tony Baldry warned Mr Cameron’s hopes of winning the next election had been damaged by last night’s vote.
‘Colleagues have got to realise that we’ve got to get a grip and support the Prime Minister.
‘Electors do not vote for parties that they see as being divided. I do not believe that the Conservative Party should be putting itself in the position to lose the next general election,’ he told BBC Radio 4.
The PM yesterday indicated he would use Britain’s veto unless Brussels agreed to limit its budget increases to the level of inflation.
But this did not satisfy the Eurosceptics in his party, who insist on a real-terms reduction.
In the first major defeat of Mr Cameron’s premiership, a total of 53 Tory backbenchers voted with Labour, which was accused of cynically shifting its position on EU spending earlier this week to embarrass the Prime Minister.
Senior government figures had spent the day pleading with rebel Tories to accept that a real-terms budget freeze was the best possible outcome from a crunch EU summit next week.
Today Mr Osborne sought to placate the rebels, saying he understood the ‘frustration’ of MPs over ‘outrageous’ rises in EU spending.
He declined to say whether he believed a real-terms cut was possible and played down the significance of last night’s vote as a ‘debate about tactics’.
Deputy PM Nick Clegg said those calling for a cut in the EU budget had ‘absolutely no hope’ of achieving their goal
‘What we have got to do is come to a position that is agreed by the other countries and that the House of Commons accepts. That’s the circle we’ve got to square,’ Mr Osborne told BBC Radio 4.
‘What you saw last night was a debate about tactics, about the start of a negotiation, understandable frustration from MPs on all sides of the Conservative Party and the House of Commons that the European Union is spending too much.’
He also attacked Labour, claiming its tactics reminded him of the ‘unprincipled’ stances taken by Conservatives in the wake of the Labour landslide in 1997.
Foreign Secretary William Hague earlier said ministers would ‘hear and take notice’ of what Parliament had said.
But Deputy Prime Minister Nick Clegg aimed insisted the Coalition Government’s position remains the same.
‘We will not accept an increase, above inflation, to the EU Budget. That is a real terms freeze. And we will protect the British rebate in full. That is the toughest position of any European country.’
In a speech to be delivered to the Chatham House international affairs think-tank, he also turned his fire on Labour, angrily accusing them of a ‘dishonest’ and ‘hypocritical’ change of policy for short-term political advantage.
‘In pushing a completely unrealistic position on the EU budget – one that is miles away from any other country’s position – Labour would have absolutely no hope of getting a budget deal agreed.’
Ministers insist there is no chance of persuading all other 26 EU member states to accept a real-terms cut in spending, since 17 of them get more out of Brussels spending than they put in.
However, they believe that with most governments being forced to tighten their belts at home in an age of austerity, there is scope for an agreement on a freeze.
At Prime Minister’s Questions yesterday, Mr Cameron told MPs: ‘This Government is taking the toughest line in these budget negotiations of any government since we joined the European Union.
‘At best we would like it cut, at worst frozen, and I’m quite prepared to use the veto if we don’t get a deal which is good for Britain. But let’s be clear – it is in our interest to try to get a deal because a seven-year freeze would keep our bills down compared to annual budgets.’
If Mr Cameron does wield Britain’s veto, no deal will be reached – and under the EU’s rules, the current year’s budget is rolled forward, plus inflation. Annual budgets can be agreed by a majority of member states, rather than the unanimity required for a longer seven-year agreement.
But last night’s vote will increase the pressure on the Prime Minister, who last year became the first to deploy the veto when he refused to sign up to a treaty on ‘fiscal union’, to repeat the exercise at a summit next month.
Financial Secretary to the Treasury Greg Clark said in yesterday’s debate: ‘We want to see the EU budget cut. Part of the negotiating mandate that the Prime Minister has agreed is that the very most that we would accept would be a real-terms freeze.
‘If there is no cut or no real freeze, there is no deal. The framework will be vetoed. The Prime Minister has a formidable task in persuading other countries of this, many of whom were looking forward to a seven-year payout.’
Rebel Douglas Carswell said: ‘This is not about Tory divisions or Labour hypocrisy, it’s the moment the House of Commons finally said, “Enough is enough”. Enough to the Whitehall elite and the Eurocrats. We will not put up with it any more.’
Peter Bone, another Eurosceptic MP, hailed what he called a ‘remarkable victory’. ‘Parliament spoke for the people,’ he said. ‘There was enormous pressure on colleagues to vote with the Government. It was a very significant victory for the people. It was because MPs have to face their constituents.’
There were bizarre scenes in the Commons as backbench Tories clashed with each other and with Labour members.
Veteran MP Edward Leigh compared his colleague Sir Tony Baldry to wartime prime minister Neville Chamberlain, who was accused of selling out to Hitler, after Sir Tony warned it would be an act of supreme ‘self-indulgence’ to defy the Prime Minister.
Remarkable victory: Peter Bone, left, said that the defeat was the day Parliament spoke for the people while Douglas Carswell added that it was the moment the House of Commons said ‘enough is enough’
Sir Tony denounced claims by the rebels that defeat strengthens Mr Cameron’s position at next month’s summit as ‘cobblers’.
He warned that failure to back Mr Cameron would cause the Tories to lose the next election. ‘If colleagues are not prepared to support the Prime Minister, every time they go into a division lobby different from that of the Prime Minister, they are weakening the Prime Minister’s negotiating hand in Europe,’ he said.
Abstained: Senior Right-wingers such as former defence secretary chose not to vote rather than side with Labour
‘We simply cannot carry on with this sort of self-indulgence. If this party hopes to be in government after the next general election, it has just got to get a grip and start supporting the Prime Minister.’
Labour’s Treasury spokesman Chris Leslie, meanwhile, was jeered by Tories who accused Labour, which gave away a huge chunk of Britain’s budget rebate and waved through inflationary increases while in power, of a cynical stunt.
Mr Leslie repeatedly refused to say whether Labour would use a budget veto, though his fellow Treasury frontbencher Rachel Reeves had earlier suggested the party might.
Mr Leslie said: ‘A real-terms reduction is possible but it requires persuasive diplomacy, careful alliance building and, above all, leadership.’
Senior Right-wingers such as former defence secretary Liam Fox abstained rather than vote on the same side as Labour. But in a hard-hitting speech yesterday Dr Fox warned Mr Cameron that he must threaten to leave the EU or he ‘cannot achieve’ his pledge to renegotiate the UK’s relationship with Brussels.
‘If you’re not willing to cross the Rubicon on that point you cannot achieve what we’re trying to achieve,’ he told the Institute of Economic Affairs. Dr Fox said the Tories should enter the next election on a pledge to go ‘back to the Common Market’, stressing economic not political links with Europe and then offer a referendum on the new deal or exit.
A source close to the Prime Minister said: ‘We were expecting to lose this vote. Everyone agrees we want to keep down EU spending. The only difference is how you do that.
‘The Prime Minister has made it very clear that a cut is the best case scenario and a freeze is the worst case scenario. He will keep fighting to get the best deal for taxpayers. David Cameron is the only Prime Minister in history to use the veto and our backbenchers understand that. Parliament is absolutely right to express its view. It’s a “take note” motion and we will take note.’