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 Blair's
budget myths exposed
22nd December 2005
Tony Blair
made a statement in Parliament on Monday, explaining the new
EU budget deal that was negotiated over the weekend.
With quotes
from his statement to the House of Commons, the DM exposes the
realities behind the key points he has made in defence of the
deal.
MYTH
1: "This deal is an investment in the future prosperity
and stability of eastern Europe"
REALITY:
The extra £2.5bn per year 'investment' Tony Blair has
agreed to, on top of the net £3.5bn Britain already pays
every year to the EU, would be paid into EU coffers, not ring-fenced
for any Eastern European country.
Where
the money subsequently goes to from EU accounts no-one actually
knows for sure. The EU's own auditors have been unable to
approve the EU's accounts for an astonishing 11 years running.
[Another
'nul points' for EU book-keeping, The Times, 16th
November 2005]
If we
wish to invest in the future prosperity and stability of Eastern
Europe or indeed anywhere, deserving
cases would get more of the money we and other countries have
to offer if grants were made directly, rather than via a leaky,
expensively administered central EU budget.
Such a
system would also be far more democratically accountable than
just fire-hosing large quantities of cash at inefficient &
undemocratic EU institutions.
MYTH
2: "The purpose of the budget is rightly to transfer
resources from the wealthier west of Europe to the poorer east
of Europe"
REALITY:
This is not true. Rich countries will still receive the most
money from the EU. Per head, the top three recipients of EU
funds will continue to be old member countries - Luxembourg,
Belgium & Greece.
Wealthy
countries like Ireland and Belgium will continue to be net
recipients from the budget.
The EU's
budget for 'administration' alone will be £34bn, rising
28%. Central EU law-making is to receive billions more in
areas like 'justice & home affairs', 'freedom security
& justice' and 'the EU as a global partner' including
'a substantial increase in the Common Foreign and Security
Policy budget'.
MYTH
3: "the rebate will rise, not fall"
REALITY:
Blair attempts to mislead that this is a success, by not explaining
why this will happen.
The rebate is a refund of a proportion of the amount we pay
to the EU. It would only go up if our net payments to the EU
have also gone up.
And as Blair himself later confirms, our contribution to the
EU "will increase by 63% over the next financing period
in comparison with 2000-2006."
MYTH
4: "it was right that the UK should contribute properly
to enlargement...we have to be ready to accept our fair share
of the costs of that policy."
REALITY:
Under the current arrangements, Britain already pays more
than its 'fair share' to the EU.
Between
2000 - 2004, on average Britain paid £3.5bn per year
more to the EU than we received back. Britain is currently
the second largest net contributor to EU funds.
By any
standards, this is a 'proper contribution' to the EU's costs
- many say, far too much. Yet Tony Blair has still agreed
to a near doubling of the amount we will pay to over £6bn
per year on average from 2007 onwards.
MYTH
5: "we also agreed on a fundamental review of all
aspects of the EU budget, including the CAP...it is then possible
for changes to be made to this budget structure in the course
of this financing period."
REALITY:
First Tony Blair said that there would be no reduction of
Britain's rebate without "reform" to the EU's wasteful
Common Agricultural Policy (CAP).This was then watered down
to a 'commitment' to reform. Now all Blair has secured is
a 'review' of EU spending...in 2008.
But those
who stood in the way of CAP reform during these negotiations
will still have their veto in 2008. And since the budget deal,
they have confirmed that they will not support any change
to the CAP before 2014. Read the article here.
New member
states, which will receive large payments from the CAP, will
also become less willing to reform the policy.
MYTH
6: "UK and French contributions will from 2007 for
the first time in history be in rough parity"
REALITY:
This is simply not true. Britain's net contribution between
2007-2013 will be £42bn - £6bn per year. France's
will be £35bn. Britain is therefore paying a significant
20% more than France, despite our economy only being 6% bigger.
Britain
will also receive less EU money per head than any other EU
member country - half what France will receive and a quarter
of what Ireland will get.
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