Tories question economic benefits of EU membership

Leading Conservatives in the UK have challenged the government to justify the £6.4 billion net contribution the British exchequer will make to the EU coffers next year – a 60% rise on this year.

John Redwood, formerly secretary of state for Wales, placed the blame squarely at the feet the Labour government for “needlessly throwing away” former Conservative Prime Minister Margaret Thatcher’s “excellent” rebate. 

Speaking on BBC Radio 4’s Today programme, Redwood said that during this time of economic hardship, British taxpayers were being forced to increase their contributions to the EU, “an area where we don’t need increases”. 

He argued that the surge in British EU spending was testament to the Labour government’s “incompetence” during EU negotiations. 

“If you look at the money we do get back, it is often spent in ways we wouldn’t choose to spend it. We need to be masters of our own budget, and capable of weeding out cost and needless expenditure where it rests,” Redwood added later. 

British Conservatives have multiplied their attacks on the European Union in recent months, stating their opposition to the Lisbon Treaty and saying they would seek a popular referendum for its approval should they return to power in elections next year. 

With the 2010 poll looming, the Conservatives are well ahead of the Labour government in opinion polls and have started questioning the UK’s role within the EU (EURACTIV 22/07/09). 

Tory MP Bill Cash was equally bombastic in his criticism of the increase in Britain’s net contribution to the Union, suggesting it was time for to tell the Treasury that “we do not want to be part of this failed, uneconomic debt-ridden European political body, which has now taken almost complete legislative control over Westminster. Instead, we want a new deal”. 

Cash said that while the figures were “appalling” in their own right, “the truth is that the costs are much higher”. 

“Do the Treasury figures, for example, include in their assessment the financial costs of damage done to small businesses every year by business regulation?,” queried the veteran Tory MP, adding that he would be “very surprised” if they did. 

Leading Conservative MEP Daniel Hannan noted that former UK Prime Minister Tony Blair relinquished the British rebate at “precisely” the moment EU leaders were creating the post of permanent president of the EU Council. 

Hannan, who rose to international notoriety earlier this year as a YouTube sensation after a European Parliament speech, suspects that the two decisions may have been linked in Blair’s head. 

“Blair’s own thoughts were turning to what he would do when he handed over the premiership following the coming general election,” wrote Hannan in his blog. 

UK rebate cut came after EU enlargement 

Hannan recalls that Blair had relinquished the rebate in exchange for comprehensive reform of the Common Agricultural Policy (CAP). Hannan alleges that Blair gave the rebate away “for nothing”, as rather than reducing the CAP, the EU has increased spending on agriculture. 

Speaking in 2005 after the EU budget negotiations, Blair stressed the deal was “an investment in those Central and Eastern European economies” that “will also yield enormous returns” for British companies gaining access to new markets. 

Defending the agreement, Blair said: “My case is that you have to ensure that the enlargement can go ahead – and that’s the reason for Britain paying its fair share for the cost of economic development. If we believe in enlargement, we had to do this deal now.” 

British Prime Minister Margaret Thatcher first secured the UK rebate from the EU budget in 1984, with the famous expression "I want my money back". 

The main reason for the rebate, worth £3 billion at the time, was the high proportion of European Community funds spent on the Common Agricultural Policy (CAP), which brought little benefit to the UK due to its relatively small farming sector. 

But since the 2004 enlargement, Britain has been under pressure to reduce the rebate after the Union expanded to include ten poorer, former communist countries. 

During negotiations on the EU's long-term budget for the period 2007-2013, British Prime Minister Tony Blair thus came under intense pressure to relinquish the UK's rebate. 

30-hour negotiations were required at the December European summit before agreement could be reached on the EU's budget for 2007-2013. Blair eventually bowed down and agreed to increase the UK's contribution to a maximum of 10.5 billion euro for the 2007-2013 period. 

The additional UK contribution would be adjusted in the event of future EU enlargements, with the exception of Romania and Bulgaria, EU leaders agreed back then. 

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