Things have moved on a bit in the argument about EU money to the UK to help regions hit by floods last summer, the subject of this post.

  • NEW – Helga Truepel MEP is now on the warpath on this one, having written a press release on the issue (EN | DE) demanding clarifications from the UK government, and she’s also written a letter (PDF file here) to the chair of the EP’s Budgets Committee, Reimer Böge, demanding action – including inviting John Healey to Budgets Committee. Oh, that would be fun!
  • The Yorkshire Post has printed a new article on the topic, citing Richard Corbett’s critique of what’s going on. Corbett’s line is completely right – the Treasury is at fault, and I do wonder whether Healy was correctly advised. HMT after all thinks it’s the only reasonable economic ministry anywhere in Europe – I would beg to differ.
  • Neither of the other Labour MEPs potentially implicated in this – Linda McAvan (Corbett’s colleague in the North West) or Glyn Ford (South West) have said anything about the matter. Not much of a surprise I suppose, even though McAvan is a member of the EP’s environment committee. Glyn Ford’s website doesn’t even seem to have a functioning news function.
  • Graham Watson, Lib Dem MEP for the South West, has commented on the mess, as reported by the Aberavon & Neath Lib Dems.
  • The Ulster Unionists also have a position on this – demanding the Northern Ireland gets its full share of the money. Well, of £31 million I suppose?
  • There’s an interesting theory of why the government had to take this action in the comments on my previous post.

Let me also make this clear: whatever you think of the UK’s budget rebate (for the record: I hate it) and whether the flood hit regions should get £31 million or £110 million (for the record: I want them to get £110 million), one thing is crystal clear in all of this: the decision to reduce the payment from from £110 million to £31 million was taken by the UK Government – the Treasury – and not by any bureaucrat, politician or official in Brussels.

9 Comments

  1. I have to say I’m with what seems to be the majority on the maths of this.

    If work said they were going to pay for my travelcard next year with a £1000 cash bonus, but then took £700 out of my annual wages as a result, I’d certainly feel they had paid for only £300 of my travelcard. If they did the same trick for a voluntary expense, I would be very upset if they then criticised me for only spending £300 on it!

  2. Mike Hanlon

    Jack Thurston said: “The EU is really an intergovernmental system”

    And where does QMV fit into an intergovernmental system?

    I wish we did have intergovernmentalism for co-operation in Europe – rather than the relic of 1950s superstate ideology that is today’s EU. A centralising system misguidedly supported by some with otherwise perfectly respectable federalist ideals.

  3. @Tim: I guess you haven’t spent much time watching the WTO. The idea that all of its 150 members are equals is something that looks good on the WTO website but is evidently not an accurate description of how things work. The current negotiations at the WTO are being driven by a ‘quad’ of EU, US, India and Brazil.

    Similarly, the UK is not one among 27 equals in the EU. It is in the troika of biggest member states and can command commensurate power, if it would exercise it with a modicum of tactical nous. We even have a British free-trader as EU Trade Commissioner.

    It is very rare for either the EU or the WTO to come to decisions by threat of veto.

    You might think unilateral free trade is “intensely desirable” but it also “intensely unrealistic”. The UK had plenty of import tariffs before it joined into the EU, remember. It’s an interesting question, whether the UK is more open in relation to its main trading partners as a member of the EU than it was before joining. I don’t know the answer, but I’d be interested in hearing from anyone who does.

    Much as we might bemoan mercantilism, it’s the way the world works right now, and it isn’t likely to change anytime soon. Exporters want the help of their governments in opening foreign markets, and deals can be done.

    Having said that, the EU’s ‘everything but arms’ market opening for the world’s poorest developing countries is a notable example of a significant unilateral move to free trade. Not perfect but a step in the right direction. It just happened a major priority of the UK government at the and the then EU trade commissioner, Pascal Lamy.

  4. boing boing

    Question: is there any good reason why flood aid should be run out of Bruxelles? I’d love to know the answer.

    See also: Britain’s regional development policies.

    It really is (as Tim says in response 1) all about having a blue plaque on the front.

  5. Jack, in the WTO every country has a veto. By handing over the negotiations to the EU the UK has done from 100% of a veto to 1/27 th of one. Thjis is not normally thought of as an increase in power.
    Further, you’re really rather missing the point about trade: still a little mercantilist I fear. The point of trade, the value to us of it, is in the imports we buy.
    This is restricted by the zollverein, we are not allowed to buy imports from around the world as we might wish. This makes us poorer. And given that the bureaucratic structure relies upon said customs barriers for 15% of its revenue, it’ll never disappear, will it?
    In other words, the EU specifically forbids us from declaring unilateral free trade, something which is intensely desirable.

  6. Tim, you’re not following me.

    Would it make you happier if the flags on the EU project were German, Dutch, Austrian, Belgian, Danish and Swedish – the main contributor countries to the EU budget?

    The EU can claim credit for making the policy happen, but you need to get over the delusion of thinking that the EU is some kind of ‘other’ entity

    The EU is really an intergovernmental system, even though federalists like Jon would wish to see it otherwise. The Council is made up entirely of member state governments and the Commissioners tend to defend their own national interests more often than was envisaged. After all they’re politicians and they want a place to go home to once their term is over. And as for the Parliament… well MEPs are elected by national constituencies and anway, the Parliament has very few real powers when it comes to expenditure.

    And as for free trade, the EU did more to bring free trade to the UK than any other institution – free trade with 475 million of the world’s most wealthy consumers, and the power to negotiate on equal terms with the US, Japan, India and China. Outside the EU, the UK would have all the power at the WTO of….erm… Norway, i.e. not very much.

  7. “The mechanics of the rebate negotiated by a certain Margaret Thatcher means that when additional money is allocated from the 26 member states to the UK, there is a recalculate of the rebate. The net result is that the UK increases it’s contribution to the EU budget by about two thirds of the value of the additional spending.”

    Quite, my point. Most ( as I did not) do not know that. So when we get that EU flag on some project in Nantwitch, or flood whatever, the EU claims 100% of the credit for the spending, while those seeing the sign don’t understand that 66% is coming from their own pockets.

    As I said, lying bastards.

    As to 15% of the budget coming from tariffs: well, how are we to ever get free trade if the only directly controllable income stream of a bureaucracy is from tariffs?

  8. @Tim:
    I think you’ve got a rather foggy notion about what are ‘EU funds’. There are precious little EU funds per se, 70% of the money spent out of Brussels comes in member state contributions to the EU budget. The rest is made up of levies charged by the EU on imports (15%) and a slice of the VAT receipts of member states (15%).

    So the idea that there’s this great big money tree in Brussels and that every member state’s duty is to shake it as hard as it can on behalf of its citizens is entirely misplaced. Money doesn’t come from ‘the EU’ it comes from EU member states.

    The mechanics of the rebate negotiated by a certain Margaret Thatcher means that when additional money is allocated from the 26 member states to the UK, there is a recalculate of the rebate. The net result is that the UK increases it’s contribution to the EU budget by about two thirds of the value of the additional spending.

    But this makes sense if the idea of the rebate is to correct for the fact that the UK doesn’t have a very large agricultural economy compared to its size and since the CAP accounts for just under half of all EU spending there is a politically unsustainable imbalance between what the UK puts in and what it gets out.

    If there were to be a change in the structure of EU spending policies such that the value of the CAP was reduced, the rebate would be unnecessary.

    But we are where we are, the rebate works as it was designed. If the UK is allocated some extra money as a result of a decision made in Brussels, the imbalance that the rebate is meant to correct is reduced, so the rebate should be reduced accordingly.

    The Treasury thinks its job is to be mean and it is rarely outed in this way. I hope it’s shamed into complying with the decision made in Brussels (to which the UK was a party, remember) to allocate this money to flood-affected communities.

  9. “”They are correct in that in the long run the net gain to the Treasury is only £31m but that ignores the fact that the EU allocated £110m to flood-hit communities and they’re now not going to be seeing anywhere near that amount.””

    Right, so as I said last time the nett income is £31 million so what are you fussing about? £31 million is being spent.

    Let’s put it the other way around shall we from the point of view of those doling out the fiunds from the EU?

    “Hey if we *tell them* they’re getting £110 million then we get great headlines saying that the EU is really great and helpful. But of course no one will know that we just take the money back from hte general revenue next year so in fact the UK taxpayers are paying £79 million of what they think is coming from thte EU. Great Eh?2

    “You’re right great!. And of course no one would be rude enough to call the bluff would they…..”

    Or have we now got to the point that if the EU allocates £79 million of UK taxpayers’ money to the floods we just have to go along? We pay they get the credit?

    You know, I didn«’t in fact know that this is how he Solidarity fund works but thanks to you I now do: and I think it stinks. I shall now know that whatever the headline number, only one third is in fact being paid out of EU funds.

    Lying bastards.

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