Andrea Leadsom MP: The Reckless Amendment is not in Britain's best interests

Andrea Leadsom is the Member of Parliament for South Northamptonshire. Follow Andrea on Twitter.

It’s a sad day when I have to disagree with Eurosceptic Colleagues — my personal views on Europe are more often in step with theirs — but I think the Reckless Amendment is wrong for Britain. It won’t produce the reform that British voters are looking for, and it could ironically result in higher cost to Britain’s taxpayers, while damaging our scope for negotiations on the direction of expenditure.

The next Multiannual Financial Framework (MFF) — the subject of tomorrow’s vote — sets the maximum spend for the European Union from 2014-2020.  It is surely the expenditure limits within that MFF, however, which are ripe for radical overhaul, and where the focus for reform should be. By far the largest spending items are Structural Funds (regional spending) and the CAP, together accounting for over 75% of the EU budget.  Spending on trade and services, on the other hand, is only around 2%.

The Fresh Start Project, which I co-founded over a year ago, is looking at what are the really critical issues for British taxpayers — how to reform Britain’s relationship so that our taxpayers get a better deal as a full member of the EU. The EU has recently signed Free-Trade Agreements with South Korea, Columbia and Peru, but where is the free-trade deal with America? Or with China? Or with Mercosur? These are the markets that EU budgets should be spent on — breaking open the world’s biggest markets, to the benefit of all EU citizens.

So, the first reason why I think the Reckless Amendment is wrong is that it focuses on the wrong priorities — the amendment only targets the maximum spend — it doesn’t deal with either the actual annual spend, or with the direction of expenditure.

Secondly, the amendment takes out substantive points in the government motion — specifically it removes the condemnation of Labour’s 2005 decision to give away £5bn of the UK’s annual rebate. My suspicion is that Labour have agreed to support the amendment as long as their role in adding £5bn to the burden on British taxpayers is not mentioned. This is a cynical attempt by Labour to damage the Government’s increasing commitment to a reform agenda for Britain’s relationship with the EU. The Government has set out on a path to an EU, in the Prime Minister’s words, “with the flexibility of a network, not the rigidity of a bloc.” This will require determination and patience and grasp of detail to deliver.

That brings me to the third reason to vote against the Reckless Amendment: Britain’s use of the veto. The Government’s position of resisting an inflation-busting rise in the MFF is a logical step, consistent with a reforming agenda and supporting the EU, though without permitting an expansion in its activities. It’s a position that other key EU Member States (France, Germany, Netherlands, Finland) supported in 2010. It still has some chance of being delivered. If we fail to deliver on it, the Prime Minister should again use the veto. Calling for a significant cut, on the other hand, has almost no chance of success, and undermines the credibility of a reforming stance. It also would almost certainly result in our veto being used.

The consequences of using the veto are not straightforward. If there is no agreement on the new MFF, the 2013 annual budget is taken as the base and is up-rated by 2% per year, to take account of inflation. The 2013 annual budget is higher than some, but not all, of the new MFF years. In theory, the European Commission, the European Parliament or the Council could terminate that arrangement, leaving the annual EU budget without a ceiling at all, and with the annual budget to be decided by QMV. (That doesn’t seem likely to happen, though, as the European Parliament has appeared to accept that the 2013 ceiling would be rolled over if a new MFF was not adopted).

In summary, the Government’s own motion (with little chance of acceptance by the EU) implies a high chance of the veto being used; the Reckless Amendment (with no chance of acceptance by EU) almost certainly means the veto will be used. Hence the biggest problem with the Reckless Amendment is that it offers no realistic hope of an outcome which serves the UK’s overall interests. Worst of all, it risks a political win to a cynical Labour Party, whose own MEPs were last week voting for the same budget freeze which Conservative MEPs are pressing for.

The amendment to back, in my view, is the Jacob Rees-Mogg and Peter Bone amendment. These are 2 men with a usually spot-on sense of what Britain really thinks (presumably Mrs Bone is behind it...). In their amendment, they have identified the serious omission from the Government’s motion — they call for any proposed Financial Transaction Tax to be vetoed. An FTT would cause significant damage to UK financial services, a sector that provides over a million jobs and over 10% of our annual tax take.

Rees-Mogg and Bone call for a veto on anything beyond a freeze in the MFF and make clear who is responsible for the massive increase in UK contributions to the EU — Blair’s decision in 2005 to give away the rebate for nothing in return has already cost £5bn, a figure increasing by £2bn annually.

We shouldn’t let Labour get away with it, and I am urging colleagues to support the government on this one.