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Financial Management

With the leave of the House, I should like to respond to the debate. First, I want to refer to the comments made by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty), who acts as Chairman of the European Scrutiny Committee. He said that he believed that the glass was more than half full and rightly pointed out that for the first time the Court has this year given a positive opinion on the reliability of the EU's accounts, with no reservations. He also suggested a number of other areas where improvements had been made. I agree with him that there have been some positive developments, but I like a full pint. We need to be relentlessly dissatisfied with the level of progress. That is why the Government will continue to press through the European Court of Auditors and other forums, in particular the February ECOFIN discussions in Britain, the need for the Commission and member states to continue to do better in the future. I was rather surprised to hear one hon. Member suggest that we should refuse, in effect, to make future contributions to the European Union until all this was sorted out. I do not think that that is a realistic attitude. The UK is required to make its contributions under obligations imposed by the treaties, as the European Communities Act 1972, and section 2 in particular, gives effect in the UK to Community law. We must recognise, too, the clear and demonstrable benefits of the UK's membership of the EU. EU membership has delivered and continues to deliver significant benefits to the UK and the whole EU. The EU is key to the success of business in the UK. Europe accounts for nearly 60 per cent. of our trade, 700,000 British companies have trading ties to Europe and at least 3.5 million jobs depend on Europe. It is important that we retain membership of the EU. I am pleased to see that the Conservative party has decided to appoint a shadow Secretary of State for Business, Enterprise and Regulatory Reform who is a wholesale enthusiast for Europe. I look forward to debating the issue of Europe with him in due course in my other role as a Minister in the Department for Business, Enterprise and Regulatory Reform. A number of Members raised the issue of the UK's abatement. I want to make it clear that the 2005 budget agreement preserved the British rebate in full on agricultural spending and all spending in the EU15. The UK abatement will be disapplied by a maximum of €10.5 billion on spending for economic development in the new member states. That will not change, but we believe that it is right that we should pay our share of the costs of EU enlargement, which benefits the UK economy. The year 2010 will be the first full year of disapplication of some spending in new member states from the calculation of the abatement, resulting in the higher net contribution that has been referred to, which was published in the pre-Budget report. It is important that the UK should pay its share of the enlargement costs.