Cameron's EU budget deal is bad for Britain and for the eurozone recovery

Spending on the bloated Common Agricultural Policy has been increased, while spending on infrastructure and other growth projects has been cut.

David Cameron was right to call for an EU budget cut. Agricultural payments and regional funds have been bloated and badly spent for years. But the deal he looks to have secured is bad for Britain and bad for the eurozone recovery.

Last year, IPPR called for a 25 per cent cut in the EU budget with reductions to the Common Agricultural Policy (CAP) and the repatriation of regional funds for rich countries. We suggested that Cameron put the UK rebate on the table in order to deliver this 'grand bargain'. Our calculations showed that the UK would be better off as a result, with a lower net contribution than at present. But in order to secure a headline cut in the overall size of the budget, to assuage eurosceptic demands, the Prime Minister appears to have taken a backward step on the road to European recovery.

The British rebate has been preserved in its entirety but reports suggest that the UK (along with all rich countries aside from Italy) will end up making a bigger net contribution. This is partly legitimate because cohesion funds for poorer EU countries will increase. But it is also because €27bn of cuts have come, not from the inefficient and distortive CAP budget, which has increased by €9bn, but from the funds for competitiveness and growth.

This budget includes funding for research and development, transport and energy infrastructure, which create jobs in the short-term as construction takes place and growth in the long-term as they improve the productive capacity of the economy. For example, the Connecting Europe Facility, which is intended to increase the efficiency of energy transmission and therefore bring down bills, has been cut from €9.1bn to €5.1bn. 

By seeking a favourable headline from the already sceptical British press, the PM is selling Britain a lemon.

David Cameron and his entourage arrive back at the EU headquarters in Brussels, Belgium. Photograph: Getty Images.

Will Straw is Associate Director at IPPR.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.