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Future EU Finances and Own Resources

It is slightly scary to discover that the hon. Member for Leicester, East (Keith Vaz) is monitoring our birthdays. I will be pleasantly surprised if I wake up in the morning and find that my family is as well informed as him. I slightly regret that the Minister for Europe is not in the Chamber, because I was planning to say something nice about him. It is probably going a little too farto say that he merits our congratulations on his appointment, but we certainly wish him well. As the hon. Member for Leicester, East quite properly said, the Minister for Europe has an important job, so it is important that it is held by a senior Minister and, moreover, someone with a long and commendable pedigree on European affairs. To that extent, I welcome the Minister to his role. Speaking as a former member of the diplomatic service, however, there is one thing about the Minister’s appointment that has saddened me. The diplomatic service is one of the few Government departments that is not seriously dysfunctional, yet it has suffered the fate, a bit like Caesar’s Gaul, of being divided into three parts. Development was taken out, and now the department has been split into Europe and non-Europe. A perfectly efficient department has been split, while the Home Office and the Department for Work and Pensions continue on their merry way. That is a strange way of managing government. I approach the European Union and its finances from a very different perspective from that of the hon. Member for Altrincham and Sale, West (Mr. Brady). I basically believe that the European Union is good for the UK, but I agree with his conclusions on the subject of our debate. The deal was very bad, and that came about because the Government utterly failed to secure their negotiating objectives. As I understood it, and as was clearly stated on many occasions, the objective was to make concessions on the budget rebate to secure fundamental reform of the way in which the European Union’s funding was run, especially on agriculture. That was not achieved—indeed, it was not even begun to be achieved. None the less, the objective was right. It was equally right for the Government to say that to support the process of enlargement, we needed to make concessions on the rebate. The enlargementhas so far been a success. It is now difficult to believe that 15 years ago, the enlargement countries were communist countries. Enlargement is a success story, with rapid growth and liberalisation in stable democracies. It has been successful in much the same way as the expansion of Europe to absorb the former fascist countries of southern Europe was successful. We need to reinforce that success, and we could have done so through the budget process. It would be utterly wrong to continue to defend an arrangement under which we were net recipients from eastern Europe. The Government were therefore right to set themselves the negotiating objective of trading off the rebate against fundamental reform. There were, however, two failures. Saying that the rebate was non-negotiable throughout most of last year was a presentational failure, as it was clearly negotiable and was, in fact, being negotiated. That position therefore did not make sense, and the Government made themselves look foolish. There was a substantive failure to achieve anything concrete or measurable in agricultural reform. The reason for that goes back three years to the agreement between France and Germany, which Britain apparently endorsed, to settle the European agricultural budget and agricultural policy until 2013. Historians will be taxed by the question of why the Government accepted that arrangement because, as the hon. Member for Buckingham (John Bercow) and colleagues with different points of view have argued, the common agricultural policy is utterly indefensible. It is economic nonsense, it is environmentally damaging, and it does enormous damage to world trade and to developing countries. However, in 2002 the British Government, for whatever reason—perhaps they took their eye off the ball because they were preoccupied with Iraq—accepted an arrangement that cemented the CAP in place.