HL Deb 31 January 2005 vol 669 cc1-3

2.42 p.m.

Lord Dykes asked Her Majesty's Government:

What discussions they have had with the government of Luxembourg about financial and economic issues arising during that government's presidency of the Council of the European Union.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

My Lords, the Chancellor of the Exchequer regularly meets Jean-Claude Juncker at ECOFIN meetings in Luxembourg and Brussels. Officials also have bilateral discussions with Luxembourg, as with all member states, and this is the case with all presidencies.

Lord Dykes

My Lords, I thank the Minister for that brief reply. There are two thorny questions among many facing the Luxembourg presidency: first, the elaboration of the policy reforms under the Wim Kok phase 2 Lisbon agenda; and secondly, getting effective financial perspective for 2007–13 on funding and spending and agreement in the enlarged Community. How will Her Majesty's Government deal with these priorities reporting to ECOFIN on 8 March and subsequently to the European Council on 22 and 23 March? What will the priorities be?

Lord McIntosh of Haringey

My Lords, I knew that I needed my noble friend Lord Kinnock to sit beside me for this Answer, but I will do my best in his absence. First, the noble Lord, Lord Dykes, asked me about the Lisbon agenda for the competitive and dynamic economy. As he knows, Wim Kok produced his midterm review in November last year, and I understand that the outcome of the review will be discussed at the spring ECOFIN council. We hope for a relaunch of the 10-year programme. The noble Lord's second question was about finances. He will be aware that the UK Government wish to retain the budget at 1 per cent of GDP, which is a 6.5 per cent increase and is certainly enough for the incorporation of the 10 accession states.

Lord Lea of Crondall

My Lords, would it be fair to say that the British Government are planning on future expenditures under the ceiling of 1.00 per cent of European incomes, whereas many of the Commission documents are predicated on perhaps a 1.14 per cent ceiling? The longer this goes on, the more difficult it will be to draw up sensible plans on overseas development and other matters. The sooner this future perspective is agreed, the better.

Lord McIntosh of Haringey

My Lords. I entirely agree, but my noble friend will know that five other member states have written in support of our view that the budget should be restricted to 1 per cent. I know that the Luxembourg presidency is looking for a resolution of this issue by June. Failing that, we will pursue the matter vigorously during our subsequent presidency.

Baroness Noakes

My Lords, the Minister will be aware that the European Court of Justice will today start hearing one of the many large tax cases that will, if decided against the Government, blow a hole in the UK's budgetary arithmetic. Will the Government include in their discussions with the Luxembourg presidency the need to remove the European Court of Justice from the tax affairs of the UK, or have the Government now given up and accepted the primacy of the ECJ?

Lord McIntosh of Haringey

No, my Lords, we will not move to remove the European Court of Justice from its statutory responsibilities; and nor would the Opposition expect us to. Of course, we take its views seriously, but some of the objections that have been raised on tax matters before the European Court of Justice are extremely self-interested.