European Union Budget (Hansard, 22 July 2002)

§ Lord McIntosh of Haringey
My Lords, information published by the European Commission and European Court of Auditors shows all member states except Greece, Spain, Ireland, Portugal and Finland to have been net contributors to the EC budget in calendar year 2000, the last year for which information is available. It is too early to determine the net budgetary positions of the new member states on accession to the European Union. Negotiations on the financial aspects of enlargement are in progress.

§ Lord Dubs
My Lords, I thank my noble friend for that Answer. Is he aware that it is the view of senior figures in the Polish Government that, as things stand, Poland is likely to be a net contributor to the European Union budget on accession? They feel that that would be an absurd outcome, given that Poland would be one of the poorest countries in the European Union. Such a situation might give rise to strong opposition in Poland in any referendum on accession and could result in a negative outcome.

§ Lord McIntosh of Haringey
My Lords, I understand the difficulties to which my noble friend 2 Lord Dubs refers. The financial negotiations are, of course, incomplete. We do not yet have the budgetary chapter, nor do we have the amounts for the structural and cohesion funds. All those matters must be resolved at the summit in Copenhagen in December. Generous financial proposals are being made for accession candidates. No doubt Poland will benefit from those.

§ Lord Williamson of Horton
My Lords, does the Minister agree that, although the accession negotiations are close to a conclusion, the two vital dossiers—budget and agriculture, which are two sides of the same coin—are still open? It is perfectly feasible to avoid demanding an unjust budget contribution from the acceding states, by the use of transitional or other arrangements. Does the Minister agree that it would be helpful to express figures not only in money but as a percentage of gross national product? Incidentally, that would show that the United Kingdom was the fourth or fifth largest contributor.

§ Lord McIntosh of Haringey
My Lords, I agree with the last point made by the noble Lord. He is right to say that the negotiations are close to a conclusion on some issues. However, as I said, there are still major financial issues to be resolved.
We are happy with many of the details of what is being negotiated with regard to the common agricultural policy; we are not happy with the fact that no savings are proposed.

§ Lord Howell of Guildford
My Lords, while we are talking about budget contributions, perhaps I may ask the Minister whether he is aware that, according to the latest figures, this country has been saved £29 billion because of the abatement negotiated by my noble friend Lady Thatcher in 1984.
I turn to the issue of the contribution to be made by new members. Does not the attempt to achieve enlargement without fundamental reform of the common agricultural policy present Poland—Polish 3 agriculture, in particular—with an enormous problem? It makes things difficult, if not impossible, and could undermine the entire accession process.

§ Lord McIntosh of Haringey
My Lords, I acknowledge the value of the abatement negotiated by the noble Baroness, Lady Thatcher. It was, of course, renewed by this Government. There is no doubt that there are huge difficulties in the accession countries with the common agricultural policy. That is why it has been proposed that payments should be at the rate of 25 per cent from 2004, rising to 100 per cent only in 2013.

§ Lord Watson of Richmond
My Lords, does the Minister agree that the CAP is at the heart of the question? The best and fairest way forward available at the moment is the surprisingly radical reform of the CAP just proposed by the European Commission. Will the Minister give broad endorsement to that proposal?

§ Lord McIntosh of Haringey
My Lords, I said that we were disappointed at the fact that no savings were proposed. I could have said—and am happy to say now—that we are happy with the decoupling of payments from production and with the environmental, animal welfare and food safety provisions of the reforms.

§ Lord Tomlinson
My Lords, notwithstanding the important points made by my noble friend Lord Dubs and the noble Lord, Lord Williamson of Horton, about mitigating the most serious costs to the accession countries, does my noble friend agree that we make a fundamental mistake in talking only about the cost of the European Union, when, in fact, it is a cost-benefit equation? We ought to put at least as much emphasis on the benefits of membership for the accession countries as on the costs.

§ Lord McIntosh of Haringey
My Lords, that certainly applies to us. Three million jobs in this country are linked to exports to the European Union, and the best calculation is that the benefit to our gross domestic product is £1.75 billion. Such considerations apply equally to the accession countries, although the extent to which they apply is yet to be determined.

§ Lord Brooke of Sutton Mandeville
My Lords, I shall not deny the Government their credit for having renewed the British abatement. However, does the Minister agree that, as the rule for voting on the abatement requires unanimity, there is no way that the Community could have secured it without our approval?

§ Lord McIntosh of Haringey
My Lords, that was part of the negotiation completed successfully in 1984 by the noble Baroness, Lady Thatcher. I have never denied that. I do not do so today and I have not done so when the issue has arisen on previous occasions.

Lord Bruce of Donington
My Lords, will my noble friend see to it that steps are taken to ensure that the Commission does not try to take over the role of governments in this matter and thus may present all governments with a. fait accompli?

§ Lord McIntosh of Haringey
My Lords, I am not sure what my noble friend means when he says, "in this matter". The European Commission is not going to take over the role of governments. Neither this country nor any other member state would agree to that. It is not even being proposed.

§ Lord Campbell-Savours
My Lords, while it is true that there was an upside to the question of abatement, is it not also true that there was a downside? During the negotiations with the European Union, we found repeatedly that we were compromised by the very existence of the abatement and thus we lost out.

§ Lord McIntosh of Haringey
My Lords, the point about our renewal of the abatement was that we succeeded in doing so while restoring ourselves to a position at the heart of the European Union. That was the significant achievement of this Government.

§ Lord Stoddart of Swindon
My Lords, the noble Lord referred to Poland as one of the applicant countries likely to make a net contribution. Are any other countries from the nine applicants also likely to make a net contribution? Furthermore, will the countries that are currently net recipients lose out, thus meaning that those which are net contributors will have to pay more?

§ Lord McIntosh of Haringey
My Lords, I did not say that Poland would be a net contributor. In response to my noble friend Lord Dubs I said we were still in financial negotiations and thus we do not yet know. We have made generous financial proposals to the candidate states, but we must acknowledge the difficulty that those countries will find that it takes time to put forward realistic proposals for the use of the funds which will become available to them, in particular the structural and cohesion funds. Those proposals may take time to develop. Thus there may be accession countries that are in deficit at the beginning, but which will recover their position as time goes on. That applies not only to Poland but to all the other accession countries.