Cameron set to win a cut in the EU budget - but there's a catch

Even if European leaders agree to a €34.4bn cut in the EU budget, the UK will almost certainly pay more.

David Cameron went into the EU budget negotiations insisting on "at worst a freeze, at best a cut" (Labour and rebel Tories had demanded that he go further and insist on a cut) and after a long night of talks, it looks as if he's secured the "best". For the first time in its history, the EU is set to agree to a cut in its next seven-year budget. Earlier this morning, EU president Herman Van Rompuy tabled proposals that would see the union's spending limit for 2014-20 reduced from €942.8bn to €908.4bn - a  €34.4bn cut and a saving of £400m-a-year for British taxpayers. 

If approved - EU leaders have just taken a two-hour break from the onerous negotiations - a cut would be a triumph for Cameron. He will have defied those who claimed that his promise of an in/out referendum on Britain's EU membership would leave him unable to achieve a successful outcome.

The catch, however, is that regardless of whether the EU agrees to a real-terms cut in its budget, the UK's net contribution will almost certainly increase. This is largely due to a reduction in the British rebate agreed by Tony Blair in 2005 to meet the cost of EU enlargement (a cause the UK had championed) but a cut in the EU budget will look less impressive to voters if it turns out that we'll still be paying more. Tory MP Mark Pritchard, one of those supported a real-terms cut when the Commons voted last October, tweeted this morning: "It will be a historic, but 'bitter-sweet' outcome, if the PM negotiates a real terms cut in the EU budget but sees the UK contribution rise".

In addition, the overall budget will still need to be approved by the EU parliament and German Social Democrat Martin Schulz, the president of the parliament, has been making sceptical noises this morning. He is threatening to veto the proposed deal on the grounds that it would create a structural deficit. "The [budget] in the form currently being proposed, however, would turn what is already a legally highly questionable trend into a structural deficit," he told EU leaders. 

Worst of all, while spending on the bloated Common Agricultural Policy (a slush fund for assorted land-owning dukes, earls and princes) will be €1bn higher than under the previous proposal, spending on transport, telecommunications and energy projects, all vital pro-growth areas, will be €11bn lower. 

Yet given how few expected him to be in a position to announce any kind of cut, Cameron will rightly feel that the summit has been a success for him. Having once refused to contemplate a reduction in spending, EU leaders now make Cameron-esque noises about the need for restraint at a time when EU member states are enduring austerity. The draft conclusion states: "As fiscal discipline is reinforced in Europe, it is essential that the future Multiannual Financial Framework [the seven-year budget] reflects the consolidation efforts being made by member states to bring deficit and debt onto a more sustainable path. The value of each euro spent must be carefully examined." Arch-eurosceptic Douglas Carswell has offered the PM "three hearty cheers" this morning and so will many others in his party. 

David Cameron arrives at the EU Headquarters on February 7, 2013 in Brussels. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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A good apprenticeship is about more than box-ticking

The political apprenticeships arms race, promising ever increasing numbers of apprenticeships but with little focus on quality, is helping nobody. 

The political apprenticeships arms race, promising ever increasing numbers of apprenticeships but with little focus on quality, is helping nobody. Playing a numbers game often means the quality and the personal touch that turns a placement into a career opportunity can be lost. The government has set a target of three million new apprenticeships by 2020. In London Boris Johnson set a target for 250,000 apprentice starts, but fell short by over 100,000. Both targets miss the point; any target should focus on outcomes, not just numbers through the door.

Policy makers need to step back from the rigid frameworks and see what works on the ground.  For me this involved eating a bacon sandwich, which is arguably a risky exercise for politicians.  I was seeing how the owner of the Bermondsey Community Kitchen and Café, Mike, has transformed the space above his café into a training kitchen teaching young unemployed people the skills they need to gain qualifications to work in restaurants.

The posters on the wall spell out the choices available to the young people. They make it explicitly clear that there is an alternative to a life in prison, which some of the trainee chefs have already experienced, with pictures of celebrity chefs including Jamie Oliver, Delia Smith and Gordon Ramsay outlining how they worked their way to where they are now. None of the young people have had an easy start in life. Barriers they face include autism, lack of literacy skills, insufficient funds to pay the fare to the café and criminal records. But Mike and the team running the kitchen are determined to give them the chances every young person deserves. From City & Guilds qualifications, work placements and ensuring they have a job at the end of the process, this is the type of grass roots project that the government could learn from. With two groups of eight students over three half days, this is skills training that is about as personal as it gets. The young people are enthusiastic about the course, the practical skills they are learning and optimistic about the future.

The project is funded partly through the café, but mainly through grants and donations (including pots and pans from Raymond Blanc and funding from trusts as well as the local council). Mike has plans to expand. He wants premises with space for a nursery so young mothers who might otherwise struggle to complete a course can attend, he has a vision for two or three more similar enterprises across Southwark. I have no doubt he will achieve this but the challenge for policy makers is making it easier for people like Mike who are delivering flexible qualifications and delivering better results. Bureaucratic processes, lengthy forms and refusals would have put less determined people off. As the funding for skills is devolved, there is both an opportunity and a challenge to look at how innovative models can be supported. Unless more is done to ensure groups that might be defined as ‘hard to reach’ get opportunities, there will always be significant numbers falling through the gaps in a sometimes impersonal system.

Over 60 per cent of the apprenticeships in London focus on low level qualifications with little prospect of employment upon completion. Many skills based apprenticeships fail to match demand, the booming construction industry for example is crying out for skilled workers and with all parties agreeing new homes are a priority its surprising to learn that in London only 3 per cent of apprenticeships are in construction.

Apprenticeships need to focus on leading to work, and work that is skilled and pays enough to live on. They should be about opportunity not opportunistic employers. In a report published in October 2015, Ofsted was critical of apprenticeships saying too many of them ‘do not provide sufficient training that stretches the apprentices and improves their capabilities. Instead they frequently are being used as a means of accrediting existing low-level skills, like making coffee and cleaning floors.’

The new apprenticeship levy charged to businesses with a wage bill over a certain amount could be a useful way of enhancing opportunities but the definition of apprenticeship needs to be refined. On a recent visit to the iconic Brompton Bikes factory, the London Assembly Economy Committee was told that although the firm has to pay the new levy as a result of its size, they have a bespoke way of training their apprenticeships so they have the skills to get jobs with Brompton Bikes at the end of the process. Because this tailored training doesn’t meet the narrow government criteria they aren’t formally accredited apprenticeships and thus Brompton are unable to claim any funding back from government despite their excellent work.

I am increasingly frustrated that the most exciting and inspiring projects I visit don’t always meet the criteria for funding. We are doing something wrong if people are asked to fit something that works into a form that meets criteria rather than rewarding their successes. Instead huge amounts of public money are being put into funding low quality low skilled apprenticeships that sometimes appear to be more about avoiding the minimum wage. This is not just a waste of money; it is a waste of the lives of the young people. As the Bermondsey fishmonger we bumped in to on the way out of the café told us, sometimes what works is smashing the box, not ticking the box.