This week the UK is expected to be outvoted at a meeting of Europe ministers on the size of the EU’s next budget.
While households across the country are having to make cutbacks, and the British economy sinking further into recession, taxpayers will be forced to fund a 2.8 per cent increase in the EU’s budget – £350 million more than we currently send to Brussels. This will increase the EU’s budget to £108.7 billion a year, £13.5 billion of which is stumped up by British taxpayers. Incredibly, the European Commission isn’t happy with this and actually wants 6.8 per cent.
Britain’s current relationship with the EU is no longer in our national interest. Trade no longer has the same synonymy with our membership that it once did. As Liam Fox outlined in his speech for the TPA earlier this month, we now sell less to the EU than to the rest of the world. A recent study by the Centre for Economics and Business Research (CEBR) confirms this, showing that the big growth areas for British exports in the next 5 years are expected to be Asia, Latin America and Africa, not Europe.
What’s more, the European Commission is fleeecing taxpayers for even more money while hypocritically drawing up plans for how its member states should be cutting their own spending. Many of the EU’s largest economies are sinking in debt and any increase in the EU’s budget shows how out of touch Eurocrats are with economic reality. British taxpayers are the second biggest net contributor to the EU after Germany. They deserve a better deal.
There is lots of discussion going on today about David Cameron’s interview in this morning’s Daily Telegraph.
While the paper led on what he said about austerity, the thing that most struck me was what he said about a renegotiation of the UK’s relationship with the European Union.
The paper reports:
“He wants to negotiate a “new settlement” with the EU with powers returned to Britain.”
Good – British taxpayers are crying out for a better deal from our relationship with our European neighbours and it is high time the Prime Minister acted on his promises to get that “new settlement”.
However, the report continues:
“Mr Cameron will not countenance leaving the EU and says he would never campaign for an “out” vote in a referendum.”
WHAT?? How can Mr Cameron say now that leaving the EU is not an option? If he seeks that “new settlement” but our friends across the Channel refuse to cede enough ground to make an offer that might be acceptable to the British people, will he be happy to remain in the EU as it is today – over-centralised, over-bureaucratic, wasteful and interfering in issues which should not be within its remit?
The Prime Minister simply cannot claim that he could ever secure the best deal for British taxpayers if he goes into the negotiating chamber having already declared that he will not play his trump card – ie British withdrawal from the EU. Long in advance of the discussions, he has already given away his negotiating hand.
And he’s not the only one.
David Lidington, the Minister for Europe, wrote a piece for French newspaper Le Monde this week in which he said:
“Il n’est pas question qu’à l’issue de cet exercice, le Royaume-Uni se désengage ou se retire de l’Union.”
which translates as:
“There is no question of the UK disengaging or withdrawing from the EU as a result of this exercise.”
Again, a lamentable failure to follow this golden rule: Never give away your bottom line before entering a negotiation.
The TaxPayers’ Alliance has always sought to ensure that our messages are kept in the public consciousness by maintaining a high profile in the media.
And you can’t get more high profile than hosting an event with a former Cabinet Minister which is streamed live to the nation on the 24-hour news channels and reported widely by the national and even international press.
That was what happened yesterday when former Defence Secretary Dr Liam Fox MP spoke to the TaxPayers’ Alliance about the UK’s relationship with the European Union. It was his first keynote speech since leaving the Cabinet and we were delighted to have him use our platform to argue that Britain’s national interest is not served by its current relationship with the EU and that the Government needs to negotiate a new relationship “based on economic rather than political considerations”.
The event was given excellent coverage by all the major broadcasters – see these reports from the BBC, Sky News and ITV News – as well as gaining many column inches in the papers and the attention of many a blogger.
If you want to see what Dr Fox said yourself for in his 20-minute speech, you can watch it in its entirety in the video above.
Dr. Lee Rotherham writes for Conservative Home about his research into the EU for his latest book The EU in a Nutshell.
Support for the European Union has long become a matter of political faith. Amongst Europe’s leaders, to dispute its role is practically a heresy; to challenge its powers, a trigger for anathema.
Perhaps now may be the time for an injection of secularism into the debate.
It is of course ludicrously self-evident that – European idealism apart – different countries joined the EEC, the EC or the EU for different reasons. The driving motives were those of national concern and self-interest, even if some of the drafters had a bigger ultimate vision. Countries joined because of national preoccupations born of their time. Yet astonishingly, commentators and decision-makers seem to have forgotten this fundamental.
Ask a council leader or government bureaucrat about the need to cut spending and chances are they will at least acknowledge that money is tight and that budgets have to be reined in. They may sometimes act like money grows on trees but there is at least now a weary acceptance by politicians from all parties that the waste that still persists in much of government must be cut out.
Yet despite the pressing need to cut spending and consensus over tackling wasteful expenditure, there is still one group demanding yet more taxpayers’ money while everyone else tightens their belts. So who, in an age of austerity, would be deluded enough to think they need more money? Step forward the Eurocrats.
The European Commission has proposed its own budget be increased by nearly 7 per cent. No, that’s not a typo, the ever-expanding Brussels bureaucracy thinks British taxpayers should hand over even more money to fund its largesse. This particularly galling proposal is out of touch with reality for two reasons: we are not making necessary spending cuts at home just so the money saved can then be handed over to politicians on the continent; and it is pure folly to hand cash to an organisation that has proven such a poor custodian of taxpayers’ money in the past.
We have previously highlighted many cases of EU largesse – recent examples include the £40 million EU Parliamentarium or the ongoing debate around the £150 million spent on the EU travelling circus. Yet the European Commission demands even more from taxpayers in member states. It is so obsessed with increasing its domain and spending power that it has missed the point; it doesn’t need more, it needs less. For example, the EU could save a fortune if it scrapped its love of private jets for diplomats who spend half their time on holiday, or better yet axe the entire European External Action Service. That would mean less money wasted duplicating the work of nation states who already have well-established embassies. Money would be saved and Europe’s citizens would not find themselves without access to consular representation abroad. You could spend a lifetime writing about the various ways in which the European bureaucracy could save money by slashing its extravagant waste but one thing is clear: they certainly don’t need any more of it.
So in answer to the Commission’s latest proposals for an extraordinary budget rise Europe should answer with one voice: No, non, nien, ni, nessuno όχι, nie, nincs, ingen.
“In this world nothing can be said to be certain, except death and taxes” said Benjamin Franklin 200 years ago. Had Franklin been alive today I wonder if the European Union’s ability to waste taxpayers’ money would have featured as one of life’s certainties. The EU is not only famous for wasting money but also the spectacular manner in which it manages to do so. Even when the institution does identify wasteful spending little is ever done to end it due to organisational inertia and resistance to any reforms. The cost of holding the European Parliament in two separate cities in two different countries is just one example of a waste of taxpayers’ money that continues unabashed despite it being obvious to all.
The EU has two permanent locations for the European Parliament, one in Brussels and the other in Strasbourg. European law dictates that at least twelve meetings of the Parliament must be held in Strasbourg, which results in a travelling circus of politicians and bureaucrats shuttling between the two cities. Each month a pilgrimage takes place to the £467 million Strasbourg Parliament building. The journey is made by 736 MEPs as well as their staff, mountains of paperwork, an army of Eurocrats, lobbyists, and journalists. It’s taxpayers across Europe who pick up the bill for these jamborees and this convoy of bureaucracy is estimated to cost £150 million year . When the politicians aren’t in town the Parliament building in Strasbourg sits empty for 9 months a year. Even from an organisation that brought you the £15 million pound EU Parliamentarium and the Common Agricultural Policy this is an astounding waste of taxpayers’ money.
Things have to be pretty bad for parliamentarians in Brussels to be stirred to act. A report debated in the European Parliament on Wednesday called for a single location for the Parliament in an effort to save millions, it was backed by a vote of 429 to 184 . While it is pleasing to see MEPs finally taking action on EU waste I suspect too many are motivated by the inconvenience the circus causes them personally, rather than being concerned about the egregious waste of money involved.
To end the Strasbourg Pilgrimage to waste there would need to be a European treaty change, something France is almost certain to block. In fact the French have said previously that they will go to the European Court of Justice (based in Luxembourg, of course!) to prevent any moves to abandon Strasbourg (which also hosts the Council of Europe, European Court of Human Rights, the Euro Corps and European Ombudsman).
Because of French intransigence the travelling circus will continue, just like other failed European Union rules and policies do so. Even when our elected politicians do wake up to the need to take action we only see token changes, the EU as a whole remains an institution engulfed by bureaucracy and weighed down by a huge democratic deficit. The inability of the institution to end this costly and unnecessary arrangement at time when National Governments make tough spending decisions at home is testament to why the EU in its current form is doomed to failure. European institutions remain incapable of reversing bad policy but remain incredibly adept at wasting your money. Taxpayers need to be given a chance to pass judgement on the EU’s record, only then would our political leaders be panicked into combatting the waste that so characterises the European Union.
The Taxpayers Association of Europe is an umbrella organisation for twenty-nine national taxpayer associations – including the TaxPayers’ Alliance. Yesterday the organisation put out a furious new release calling on “national governments to refuse the creation of an ESM” as it involves “incalculable risks for taxpayers”. It is a powerful reminder of the stakes on the Continent, and why we need to ensure Britain isn’t further dragged into the crisis, particularly through the IMF.
First they present a simple guide to what the headers in the overall plan really mean, little accountability and a small board dispensing eye watering amounts of money. And then a more detailed analysis which sets out how “uncontrollable political and financial power is transferred to a small group of people”. All in the name of bailouts that aren’t going to fix the fundamental problems in the eurozone.
This is a powerful reminder of how Brussels has little respect for democratic oversight and independent scrutiny and accountability over how money they spend our cash.
Here is the full document setting out the current proposals:
As if the £15 million Parliamentarium (the propaganda temple Jonathan Isaby wrote about last October) wasn’t enough for the Brussels elite to spend on peddling ‘ever closer union’ to the public, plans are in motion to build an even more expensive “House of European History”.
Showing that the propaganda temple was merely a warm up, this new EU funhouse will seek to be:
“a place where a memory of European history and the work of European unification is jointly cultivated, and which at the same time is available as a locus for the European identity to go on being shaped…”
Their own words are enough to prove that the Funhouse is the Brussels elite’s new grandiose attempt to “shape” and “cultivate” a European identity with shameless propaganda. Perhaps it’s to convince the public that the inherently wasteful nature of the EU’s spending is worth it for the “future citizens of the European Union.”
Feeling doubtful about Brussels’ ability in objectively recounting history for visitors? Fear not: the “Committee of Excellence” that has so adamantly supported this project has assured the public in their manuscript that “a high-level Academic Advisory Board” will be appointed to ensure the “multifaceted and impartial presentation of historical facts.” So it should mention the existence of a Eurosceptic movement and some discussion of EU finances then?
Well, not quite. They instead say that there was some slight “confusion in some quarters of West European public opinion” over the “ultimate objective” of the EU post-Maastricht. With the EU funhouse approved by the European Parliament for funding in 2012 on account of it being “already under way”, we get a sense of the shoddy accounting practices of Brussels institutions.
This funhouse, scheduled for completion in 2014 but without a brick laid or a budget more precise than £58 million to £137 million (of which £18.6 million will be from UK taxpayers), is nothing more than an insulting waste of money at a time when taxpayers are making savings.
Jeremy Warner writes for the Telegraph this morning, arguing that Britain is unlikely to get impressive results out of any renegotiation associated with the EU treaty. He is right that a lot of the minor changes we’ve heard rumours about would be welcome but, in the grand scheme of things, “don’t add up to more than a hill of beans”, but if the Government is more aggressive there is a real opportunity here. As our Chief Executive Matthew Elliott wrote for his blog at the Daily Mail recently, there is a “a golden opportunity to claw back powers from Europe” if the Prime Minister is willing to seize it.
Matthew gave a list of demands that we should be making, not an exhaustive platform but a very good start:
Jeremy writes that such proposals would be “red-line issues” for both Germany and France, and as a result our “position in the internal market would become marginalised. We’d end up like Norway, forced to adopt most of the foibles of the eurozone to keep trading with it, but with no say in its constitution.”
It is actually a a myth that Norway, and the other countries in a similar position like Iceland or Switzerland, are really in that unfortunate position. Lee Rotherham wrote about this for the publication Controversies: From Brussels and Closer to Home:
The content of the [European Economic Area] Agreement is updated very regularly, but – and it is a huge ‘but’ – it can be blocked if either side does not want to include any single element of the acquis. Each individual EFTA state has a veto on the entire agreement, since it is shared between the EEA and the EU acting as two parties. This also means that national parliaments have a veto too.
He went on to cite a number of cases which show that the resulting regulatory burden is far greater than that felt by EU member states:
Firstly, according to a report by the EFTA Secretariat in Brussels for the Icelandic Foreign Ministry that was published in May 2005, only some 6.5% of EU regulations, directives and decisions had fallen under the EEA Agreement over the first eleven years of its existence, a total of 2,527 pieces of legislation. Of those only 101 required a change to Icelandic laws already in place.
There was a similar question raised in the Norwegian parliament in 2004 about how much EU legislation had been implemented under EEA terms. The then-government replied that over the period 199702993 there had been 11,511 pieces of legislation adopted by the EU. Of those 2,129 fell under the EEA agreement, or about 18.5 per cent.
From its cost-benefit analysis, Berne assessed that the cost [to Switzerland] of continuing bilaterally with the EU would run at 557 milion Swiss Francs; gaining EEA terms would cost 737 million CHF; and joining the EU would come with a net annual billion of 3.4 billion CHF, and a gross bill of 4.94 billion Francs.
Britain’s position is far stronger than Jeremy suggests. We don’t have to fear Norway or Switzerland’s fate. It wouldn’t be so bad. So the Prime Minister should be able to go and demand the repatriation of powers, that should never have gone to Brussels in the first place, with confidence.
Benjamin Franklin once observed that “In this world nothing can be said to be certain, except death and taxes.” I would venture that we could add a third: the inability of the European Union to guarantee that it has legitimately spent all of the taxpayers’ cash which the British and other EU member state governments have given it.
For today the European Court of Auditors – the body charged with auditing the EU’s accounts – has presented its annual report to the European Parliament and for the 17th – yes, seventeenth – year running, it has concluded that the payments underlying the 2010 accounts are “still affected by material error”.
Should you wish to wade through it, the full 250-page document is here, but here are the killer extracts:
“The Court concludes that overall the supervisory and control systems are partially effective in ensuring the legality and regularity of payments underlying the accounts. The policy groups Agriculture and Natural Resources and Cohesion, Energy and Transport are materially affected by error. The Court’s estimate for the most likely error rate for payments underlying the accounts is 3.7 %.
“In the Court’s opinion, because of the significance of the matters described [above] on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2010 are materially affected by error.”
What does all that actually mean?
As the ECA’s press release this morning explains, the “error rate” represents “the degree of non-compliance with the rules governing the spending, such as breaches of public procurement rules, ineligible or incorrect calculation of costs claimed to EU co-financed projects, or over-declaration of land by farmers”.
And that 3.7% error rate is as a proportion of the EU’s annual budget of €122.2 billion (£104.2 billion), which means that serious questions remain about a staggering €4.5 billion (£3.9 billion) of payments which have been made by Brussels – a figure which has increased since 2009.
And the error rate across the “Cohesion, energy and transport” budget alone was no less than 7.7%.
The fact that this happens year after year does not make it any more acceptable. Moreover, it underlines just how outrageous it is that the European Commission is seeking another increase in its budget when there are question marks over billions of its spending.
UPDATE: With a press release that anyone who knows the first thing about accounting concepts like material error would find hilarious, the EU is claiming that failing to get their accounts past the auditors yet again is some kind of triumph. They claim that: “For the fourth year in a row, the EU’s annual accounts have received a clean bill of health from its external auditors.”
After extensive negotiations, European leaders have now announced another desperate attempt to save the euro and tackle the sovereign debt crisis. Allister Heath in City AM describes the packages as “barely a draft blueprint” and “not a plan that will save the Eurozone”. George Osborne has joined eurozone politicians in their belief that the answer to their problems is a common fiscal policy.
It is a convenient answer for politicians deeply committed to political integration in Europe but it raises some pretty difficult questions. If one of the problems is that the Greeks evade their taxes, will German tax collectors be dispatched? If the challenge for Italy is a combination of high debt and low expected growth will the Estonians take on that massive debt or be let loose to impose supply-side reforms?
Economist John Kay wrote a pretty comprehensive demolition of the idea a common fiscal policy was the way forward for the Financial Times yesterday:
“Conventional wisdom holds that the eurozone problem is the adoption of a common monetary policy without a common fiscal policy. But a common fiscal policy is not necessary for a successful monetary union. No such agreement existed under the gold standard. Nor does one exist now between the US and the several countries – including China – which have pegged their exchange rate to the dollar.
Nor is a common fiscal policy sufficient for a successful monetary union. Neither the European Commission nor the German government can put tanks on the streets of Athens. The only mechanism the European Union has, or can have, for imposing fiscal discipline in any country or region is to refuse further payments to that country or region. This is precisely the mechanism that has been deployed, with limited success.
The eurozone’s difficulties result not from the absence of strong central institutions but the absence of strong local institutions. A miscellany of domestic problems – rampant property speculation in Ireland and Spain, hopeless governance in Italy, lack of economic development in Portugal, Greece’s bloated public sector – have become problems for the EU as a whole. The solutions to these problems in every case can only be found locally.”
It is worth reading the whole article. Instead of supporting their vain attempt to fight reality, George Osborne should be telling eurozone leaders they need to face up to the currency’s failure. He certainly shouldn’t let even more of our money be staked on fresh bailouts through the IMF.
Disappointing but not surprising news from Brussels has revealed a discrepancy of over £80 million in expense claims for European Union bureaucrats in 2006 alone.
Robert Galvin, a British accountant who looked over the EU’s books, found a discrepancy of £81 million in “personal entitlement” payments to EU civil servants in 2006, and saw there was “considerable risk” of further abuses. For the EU to misuse taxpayers’ money like this is simply unacceptable.
David Lidington, the Minister for Europe, has responded to the findings by saying that “reports such as these are worrying and further emphasise the need for increased transparency across all EU institutional budgets”.
That’s very easy for him to say, but will anyone ever really be held to account for these failings? I fear we all know the answer to that one, given the EU’s record on dealing with financial mismanagement.
It’s not as if this is the first financial controversy to hit the European Union. In 1999, the entire European Commission, then led by Jacques Santer, resigned following a report “exposing fraud, corruption and mismanagement at senior levels”. While then-Shadow Foreign Secretary (and now Cabinet Office Minister) Francis Maude said that “British taxpayers need to be protected from being short-changed in Europe”, it is a disgrace that this warning still applies today.
Last year the European Court of Auditors refused to sign off the EU’s accounts. For the 16th year in a row. Yes, that’s right – EU accounts haven’t been cleared for 16 years. The two largest areas of EU expenditure – agriculture and regional spending – continue to be “materially affected by error”. Yet the Brussels machine still has the audacity to be demanding even more of our money.
MPs will today vote on a motion to give the British people a say on our relationship with the European Union for the first time in over 36 years. Given the waste that continues to come from Brussels (and Strasbourg), can they afford not to listen to the people?