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Future EU Finances and Own Resources

I was wondering whether I would get through my first debate without uttering the words ““European constitutional treaty””. I am grateful for the opportunity to say those three words, but I cannot see how they are relevant to our debate this evening. I congratulate the hon. Gentleman on his initiative in introducing the issue and I look forward to debating it at some stage, when it is more relevant than it is tonight. We are all agreed about where the treaty is now, and we can debate it in future when we know where it is going, if indeed it is going anywhere. The provisional agreement also achieves the Government’s objective of retaining the existing flexibility instruments without increasing the amounts allocated to flexibility, or changing the institutional balance necessary to use the instruments. The provisional agreement includes no increases in the annual flexibility instrument, no increase in the solidarity fund, and no increase in the emergency aid reserve. Finally, the provisional IIA contains a number of elements related to improving the financial management of EU funding. The Government welcome those measures and, although they do not have to be part of the IIA, support their inclusion in the text. In addition to negotiations for a new IIA, negotiations are also now under way between EU member states for a new own resources decision, which will set out the financing arrangements for the new financial perspective. Once again, the Government’s primary objective is to ensure that the own resources decision fully reflects the agreement reached by the European Council in December. For the reasons that I have mentioned, that agreement represents a good and fair result for the UK and underlines the concept of using net balances in assessing relative contributions to the EU budget. Crucially, the own resources decision must retain the balance of net positions achieved in December, and ensure that the measures introduced to make the EU financing system simpler and more disciplined are preserved. In summary, the agreement reached by the European Council in December is a good deal for the UK and a good deal for the EU. It provides a fair and effective budget, focused on priorities, with a broadly stable expenditure ceiling, and rightly provides a foundation for economic development in the new member states. It also sets the path to fundamental reform, which should equip the EU with a modern, effective budget that meets the needs of its citizens and represents a modern Europe. I commend the agreement to the House.