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European Council: 15–16 December 2005

My Lords, I begin by thanking both noble Lords. I say to the noble Lord, Lord Strathclyde—I always enjoy listening to him—that I find it extraordinary for him to try to lecture me or this Government on the success of our presidency and on the success of the summit and, at the same time, to say that he wants to see Europe succeed when, as the noble Lord, Lord Maclennan, stated, the first action of his leader was to withdraw the Conservative Party from the EPP. I find it extraordinary to think about how the noble Lord and his party might wish to exercise influence within Europe, given that they would have to sit with the group of independent MEPs. I quote a Conservative MEP:"““These are the MEPs whom no other group will tolerate, and include people like Jean-Marie Le Pen, Alessandra Mussolini and Robert Kilroy-Silk””." I have some difficulty in understanding how the noble Lord would expect his party to serve Britain’s interests in Europe through that mechanism. On that point, I entirely agree with the noble Lord, Lord McLennan. The noble Lord, Lord Strathclyde, asked me a number of other questions about the nature of the rebate. Perhaps I can help the noble Lord by reminding him that the rebate was designed to correct an unfairness in 1984. He may recall that the noble and learned Lord, Lord Howe, and the noble Lord, Lord Lawson, have both described the rebate as an anomaly on an anomaly. It was not intended to create a new unfairness in 2005. That is precisely why we were prepared to pay our share of enlargement. We championed enlargement. Indeed, as the noble Lord may recall, successive Conservative governments also championed enlargement. But we have to pay for it. We recognise our responsibilities and that is why we think that this is a good deal. It moves resources from the richer countries to the poorer countries in the European Union. However, if the noble Lord looks at his figures, he might see that, taking the European Union average GDP as 100, the UK is above it at something like 120. A country such as Latvia is below that average, at 40. That unfairness needs to be addressed, and that is why we had a very clear objective in the negotiations to move resources from the richer to the poorer countries. It must be remembered that we also won an agreement for a wide-ranging review of the EU budget, with the possibility of changes being implemented within the current financial perspective. That is entirely consistent with what my right honourable friend the Prime Minister said when reporting in another place on discussions at the European Union Council in June. He said:"““I proposed that we have a fundamental review of the EU budget, reporting in time for us to be able—midway through the next financial period—to alter fundamentally the structure of the budget, dealing both with the rebate and the CAP””.—[Official Report, Commons, 20/6/05; col. 524.]" As for the size of the rebate, in the period 2000 to 2006 it was €5.3 billion. In the period 2007 to 2013, it will be €5.8 billion, even with the money that we are giving to support the enlargement process. I say to the noble Lord, Lord Strathclyde, that Britain did not support the common agricultural policy at the World Trade Organisation talks. We have argued time and again for the importance of reform of the CAP in the context of WTO discussions. I also remind the noble Lord that there was agreement at the summit on a wide range of issues including conflict resolution with respect to the relationships between the European Union and Africa. I endorse the point made by the noble Lord, Lord Maclennan. The redistribution is welcome. Countries in need will see their budgets go up from €24 billion to €174 billion, a sevenfold increase. Of course we all hope that the discussions in the European Parliament on these issues will be constructive.