No surrender
Afortnight ago this magazine praised the Prime Minister for a statesmanlike speech in which he made the case for abolishing agricultural subsidies and dismantling tariff barriers on food from the developing world. We repeat our assertion that if Mr Blair achieves this, it will be a legacy well worthy of honour. Unfortunately, however, he appears to be wimping out at the first hurdle. It is reported from within Whitehall that, in spite of having promised not to surrender the British rebate unless there is significant reform of the Common Agricultural Policy (CAP), the Prime Minister is preparing a fudge. The rebate will be split into two, part of which will be given up and part of which will be retained.
Tony Blair will no doubt claim it as a triumph of his negotiating skills, just as John Major was apt to do when similarly capitulating in the EU conference chamber. Look, he will say, it was me against everyone else, and still I managed to retain some of the rebate. In reality, it will be anything but a triumph.
Mr Blair is in a hugely powerful position in Europe. Unlike in the 1970s, when the failures of our economy contrasted with the then powerful performance of France and Germany, British policies on business and trade are now an example to the rest of the Continent. If you think propping up failing industries like the French wine business is the way to national salvation, he should be saying, forget it: British taxpayers are no longer prepared to advance a penny to uncompetitive farmers.
Moreover, the EU is in the feeble position of not having audited its accounts for 11 years. It shouldn’t be a case of Mr Blair simply hanging on to the British rebate; he should be warning that Britain will cease its contributions altogether unless the EU actually produces an honest set of accounts.
The British rebate, which was negotiated by Mrs Thatcher at the 1984 EU summit at Fontainebleau, is now worth about £3 billion. The EU could earn far more money by tackling a fraction of the fraud which is endemic within the CAP. In 2003 the European Court of Auditors estimated that 50 per cent of suckling cows that are claimed to be grazing in Portugal do not exist. Eighty-nine per cent of farms in Luxembourg have submitted claims for payments based on an inaccurate acreage, apparently swelling the country way beyond its tiny borders. One Greek farmer claimed to have lost 501 sheep to wolves between 2002 and 2004; a claim quickly revealed to be as much a fantasy as Little Red Riding Hood: he had only 470 sheep to start with, and was still claiming money for 470 sheep, in spite of having produced no evidence of restocking.
So it goes on. This isn’t a case of a few coppers extracted from the till. Every year the farce that is the CAP swallows half the EU’s £70 billion budget. For other EU leaders to accuse Britain of greed in demanding to cling on to its £3 billion when vast sums are being hoovered up by criminals is absurd. True, the European Court of Auditors admits that there has been some attempt to rein in fraudsters over the past couple of years, but that merely reinforces how far there is to go. Still the EU’s main response to fraud is to fire the whistleblower — as it did with its former chief accountant, Marta Andreasen.
Mr Blair’s refusal to stand up properly for his country’s interests over the EU budget is not just his failure. He is burdened with a Foreign Office that has long had too gentlemanly an attitude to negotiations within the EU. When they fly off to a summit, officials tend to start with the preconception: at what point shall we give in, and how much shall we give? It is a pathetic, defeatist attitude considering the negotiating tactics of the French and the Spanish, who begin summits by throwing a barrier around what they will refuse to negotiate. It is high time that the British Prime Minister did the same: to erect a barrier around the British rebate until such time as the CAP is entirely dismantled — at which point our contributions can be cut in half, doing away with the need for a rebate in any case.
And if it comes to it, Tony Blair should at least raise the subject of our leaving the EU. Why not? The idea that the six original EU members were doing us a favour by admitting us in 1973 was never true. But it is quite obvious now that the rest of the EU needs us more than we need them. Unlike France, which still believes it has a right to run the show, we are a net contributor — to the tune of £4.5 billion. Besides that, we are contributing hugely to the enrichment of the new, former Soviet-bloc countries by virtue of being the only Western nation to open our labour markets to their workers: much of what they earn here goes back to their home economies.
As for the advantages to Britain of EU membership, namely access to European markets, we can have them just as well outside the EU, just as Norway does. Mr Blair’s position should be straightforward: cut the CAP or we’ll freeze our payments.
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