Thursday 1 November 2012

Labour and the Commons vote on the EU Budget

The UK government was defeated in a non-binding vote in the House of Commons yesterday, with rebel Tories being joined by the opposition Labour Party to call for a real terms cut in the EU Budget (307 votes for, 294 votes against). Though David Cameron signalled support for a budget cut at yesterday's Prime Minister's Questions, it's clear that he doesn't think that anything more than a real terms freeze can be negotiated.

The debate over the EU Budget is depressing. There is no discussion of what the spending priorities should be, so the argument for cuts seems to have crystallised into a moralistic tale of mutual cuts, rather than a rational debate focused on what our priorities and values should be and what our capacity to find them is. As Olaf Camme in The Guardian wrote:

"The size of the EU's budget is not the actual problem and its reform will require more than opportunistic lip service and national point-scoring. At the very least, it will need to involve governments and opposition parties alike entering a serious debate about where Europe can add value and what kind of financial governance can best provide for it. Both dimensions are somewhat found wanting in the British debate, on the right and the left. Yet failure to do this would only underline the saying, often attributed to Henry Kissinger and paraphrased here: the politics (around the EU budget) are vicious precisely because the stakes are so small."

Labour's decision to side with the anti-EU wing of the Tory party to attack David Cameron is crass party politics.  Labour argues that the EU should cut its budget when EU Member States are implementing austerity flies in the face of their rationale for slower cuts and more investment in growth and job creation. Earlier this month it was revealed that an emergency budget is needed to plug the gap in the Globalisation Fund that is directed to helping workers retrain so they can find employment. What does Labour say about the various EU programmes to help boost growth and competitiveness in the poorer regions of the EU? Even if the UK is a net contributor, how often have we heard over the past two years that the lack of growth in the EU has hurt the UK economy? Should supporting recovery in the UK's main export market not be part of its recovery strategy? (Though the health of the UK economy is mostly in the UK government's hands).

Again: the gap for the Globalisation Fund was €10 billion, and the proposed increase in the EU budget is €9 billion. There needs to be a practical debate for how we shape the EU budget to best serve us during the recession and strengthen everyone's position in the single market. And this needs to be done as part of a negotiated solution - remember, every Member State has a veto! Supporting massive cuts in the absence of any reasoned debate beyond a "austerity for all" mantra does not make a credible budget policy.

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