The EU Budget: a tool for investment in jobs and growth

27th April, 2012 9:35 am

The EU budget never fails to attract the attention of the UK press. This week’s proposal for a 6.8% rise in the EU budget for 2013 certainly grabbed the headlines. At a time when the Tory-led coalition is making devastating cuts to the funding of public services, it’s easy to see why people think an increase in the EU budget is unacceptable.

​So what’s the reason for this increase? Commissioner Lewandowski explains that this money is already committed to projects – bills need to be paid, even in times of crisis.  The UK government has already made clear that they think this level of increase in unacceptable. But what they fail to tell you is that they agreed to fund projects and programmes that now need to be paid for. If the UK, like some other member states, want to achieve a real terms freeze, they have to be ready to identify areas where real savings can be made.

Take the Common Agricultural Policy for example. The Tories often wax lyrical about reform of the CAP, but failed to vote for a number of amendments put down by Labour MEPs to scrap wasteful export subsidies that are actually undermining our efforts to fight against global poverty. Of course, we know that in order to make long term savings in this area, we need real reform of the CAP. It’ll be interesting to see if Cameron can deliver on this when the next seven year spending framework is decided, or whether he’ll leave the CAP unreformed in return for a spending freeze and keeping the UK rebate.

Since the crisis, Labour MEPs have maintained a consistent line on the overall increase of the EU budget. We need to achieve a real terms freeze. You may ask how this position differs from that of the Tories. The real difference is this: we take real action. We don’t simply condemn the increase, but demonstrate where savings can be made.

My recent report on the European Parliament’s budget demonstrates this. I have managed to achieve a real terms cut for 2013 by freezing all members’ allowances until the end of the current mandate, cutting expenditure on travel and making efficiency savings across the board. My report also outlines where the biggest saving for the tax payer could be made: a single seat for the European Parliament. This could save millions of pounds every year and also help to reduce our carbon footprint.

The 1.96% increase adopted by a huge majority is the starting point for negotiations. By the end of the year, I hope to have found additional savings which will further reduce the increase.

The EU budget should be seen as a tool for investment in jobs and growth. Billions of pounds have been pumped in to UK regions to help economic and social cohesion. Take Wales as an example. Every year, Wales receives around 400 million pounds of European funding which provides a valuable boost to local businesses, helps get people back in to work and supports community initiatives. Can you imagine a Tory-led government offering the same deal? This funding is vital for our regions and any cuts in this area would without doubt penalise the poorest in our society.

A freeze can be achieved but only by making targeted savings and by reprioritising spending. It can’t be achieved by empty rhetoric.

Derek Vaughan is a Labour MEP for Wales and the EPLP spokesperson on the EU Budget

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  • GuyM

    The 2010 general election elected a government in favour of cutting deficits and government spending.

    An undemocratic EU should not seek to overturn that democratic reality by forcing through large budget increases even when all across Europe spending is being reduced.

    The fact that it is trying shows why the UK should refuse to fund its demands and hold a referendum immediately.

    • JoeDM

       Absolutely spot on.

      The EU is nothing but a drain on British enterprise.

  • Bill Lockhart

    The EU budget: a tool for waste, corruption and utterly pointless fat cat politicians.

  • “the Tory-led coalition is making devastating cuts to the funding of public services”

    Total cuts~: £8,500,000,000.
    Total demand by EU = : £10,000,000,000.

    As a Tory Troll from Southern England, I must say that I am disgusted by the fact that this government is not cutting at all. The deficit and debt are increasing by leaps and bounds – much faster than that in USA (See John Redwood today for the figures).

    And I adore the naivety of your advice to the EU! Honestly! I am speechless!

  • Europhile

    The EU budget is far too small to have any significant economic impact.

    In any case the Council has in the last two years insisted on cutting the Commission’s proposed budget and after a lot of huffing and puffing the European Parliament has accepted the Council’s position.

    To save money they might want tob egin with their own bloated bureacracy at senior level, appointed on the back of political cronyism of the most blatant kind, Directors for everything under the sun, a ridiculous visitors centre for visitors who would come anyway,( being subsidised) the vainglorious House of Europe project and sundry other nonsenses

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