First ever cut in the EU’s long-term budget


The European Parliament finally agreed the EU’s long-term budget today after months of wrangling.

The broad deal is the same one driven through with fellow leaders by David Cameron in Brussels last February, and Conservative MEPs today welcomed the final settlement of the spending blueprint which will take the EU through to 2020.

After MEPs put their seal on the agreement in a vote in Strasbourg, Richard Ashworth MEP, Conservative negotiator, said: “We have been four square Behind David Cameron’s deal from day one and we have made it stick. It is the first ever cut in the EU’s long-term budget and we have protected the British rebate, worth £3 billion a year.

“We have also seen off attempts for the EU to give itself new tax-raising powers, including the menace of the Financial Transactions Tax.

“We have secured greater focus on important research and development budgets which will drive recovery.

“Attempts by some MEPs renegotiate the Cameron deal have failed.

“This is a major step forward, but the need remains for wholesale reform of the budget process, to deliver truly forward-looking investment budgets in future.”

The deal reached contains the following elements (in 2011 prices):

• Commitment appropriation ceiling set at €960bn/£812bn or 1% GNI (a €15bn/£13bn cut from the current level and an €85bn/£72bn cut from the Commission proposal), this is a 3.4% cut on the current framework.

• The payment appropriation (actual cash) ceiling is set at €908bn/£768bn or 0.95% GNI (a €17.176bn/£14.56bn cut from the current level and €79.2bn/£67bn cut from the Commission proposal), this is a 3.7% cut on the current framework. This is the lowest ever % since multiannual budgets were introduced in 1993 and the first time that the EU budget has been cut.

• UK keeps its rebate in its current form (worth up to £20bn in the next MFF).

• No new own resources for the duration of the new MFF, the FTT and new VAT proposals from the Commission will therefore not be adopted to fund the EU budget.

• The deal sees more money going to new Member States (rather than simply being recycled among richer Member States) and a concentration of funds in those areas which add value, such as a 34% increase in the funds devoted to research and development.

• These proposals would save the UK taxpayer roughly €600m/£500m a year