Briefing note: European Communities (Finance) Bill
On Monday the Commons will debate the European Communities (Finance) Bill. This
puts into effect the deal on the EU budget struck by Tony Blair in December 2005.
The Financial Perspective sets the framework for the EU’s spending and revenue
raising over the period 2007-13. It consists of the Own Resources Decision (governing
how much each member state pays in) and the Inter-Institutional Agreement
(governing how much the EU spends and where it spends it).
Because the UK has agreed to give up part of its rebate, the Own Resources Decision
has to be changed, and implementing this in UK law requires an amendment to the
1972 European Communities Act, which is made by the European Communities
• Many people still think of the UK’s contribution to the EU as a small sum. But
under the 2007-13 financial perspective the UK’s contribution, after the
reduced rebate, will be £10.2 billion a year. To put the scale of this
expenditure into context, this money could alternatively be used to:
- Cut council tax by nearly 50%:
- Build 40 brand new general hospitals each year
- Employ an extra 320,000 nurses each year
- Cut the main rate of corporation tax by 11p
- Cut the basic rate of income tax by 3p
- Raise the inheritance threshold from £300,000 to £2,925,000
- Raise the income tax personal allowance by £2000
- Cut petrol duty by 75%
- Pay the total bill for the London Olympics in less than one year
• The EU budget is a prime example of the failure of the EU to reform. It is
irrational both in terms of what the money is spent on and also in terms of
where the money is spent and raised.
• In terms of what the money is spent on, the budget is dominated by two failing
policies which even the current UK Government is essentially opposed to: the 2
CAP and the Structural Funds – which Gordon Brown has said should be returned
to the control of member states.
• The complex nature of these two top-down spending programmes also
exacerbates the EU’s chronic problem with fraud – demonstrated this week by
the Court of Auditors failure to sign off the EU budget for the thirteenth year in
• Surprisingly, the Government has acknowledged in a written answer that it
agreed to a last minute €1billion increase in the budget for “administration”,
simply in order to secure "a political consensus for an agreement". In other
words the EU is to spend a billion euros on pointless agencies as a political
• Following the agreement in December 2005 the budget has been increased. The
Europe Minister said in February 2006 that the Government “strongly opposed”
any increase in spending above the levels agreed in December 2005. (Letter
from Douglas Alexander to the European Scrutiny Committee, 21 February
• But only two months later the Government agreed to an increase of €2.7billion.
• In terms of where the money is spent, the EU budget still operates in an unfair
and irrational way, with little link between spending and need. Absurdly, rich
countries like Ireland and Belgium are net recipients from the budget, while
Cyprus – with a GDP per head half their level - is to be a net contributor.
• Britain will receive only €770 per person in EU spending (the lowest of any
member state). This is half as much as France (€1480) and a quarter as much as
Ireland (€3090). Absurdly, the richest country in the EU – Luxembourg – will get
more than €22,000 per person because it benefits from having EU agencies
• Per head, the top three recipients of EU funds will continue to be old member
states – Luxembourg, Belgium and Greece. France will continue to be the
largest recipient of EU funds of any member state in absolute terms. France
will receive €89 billion from the EU over the six year period, compared to €46
billion for the UK.
• Perhaps for this reason, the UK Government refuses to publish comparativeFor further leaked data CLICK HERE
information on how much other member states will contribute to the budget.
Strangely, it has produced such data for France alone, which shows that people
in the UK will still pay 20% more per head than in France, despite similar
income levels. We are still forced to rely on leaks for comparative data:
"In politics, stupidity is not a handicap." Napoleon Bonaparte (1769-1821),
for all my contact details & Blogs: CLICK HERE
British Politicians with pens and treachery, in pursuit of their own agenda and greed, have done more damage to the liberty, freedoms, rights and democracy of the British peoples than any army in over 1,000 years.
The disastrous effects of British politicians selling Britain into the thrall of foreign rule by the EU for their own personal rewards has damaged the well-being of Britain more than the armies of Hitler and the Franco - German - Italian axis of 1939 - 1945.
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