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LEFROY Jeremy

Jeremy Lefroy is MP for Stafford. 

Recently I decided to check who has the most influence on how we spend our £720 billion[1] 2013/4 budget – Parliament and Government (including those of the devolved administrations), or the European Union?  Who controls how much the state spends, and how it is spent, is key to determining where power lies.

The largest single elements are pensions, welfare and health, accounting for £331.8 billion (46.1 per cent of all spending). The state pension is now set according to the triple lock (highest of earnings, prices or 2.5 per cent) which was legislated for during this Parliament. Public sector pensions have seen necessary reforms, all carried out by this Government with Parliament’s approval.

Welfare laws – for instance the cap or universal credit – are made in Westminster, not Brussels. There are, of course, arguments over entitled to benefits by citizens of EU countries, but those disagreements account for a small proportion of the total cost.

Then there is the NHS – brainchild of Bevan, not Brussels. No-one in the EU has copied it, nor have we been required to dismantle it. Legislation based on EU directives does affect it. However I cannot think of much that we would not have introduced anyway, with perhaps the exception of the European Working Time Directive – and even then it was, as so often, the UK Government’s manner of implementation rather than the Directive itself which have caused some problems.

Education accounts for another £57.1 billion (eight per cent). Much as I like the International Baccalaureate (a British invention, developed in Cardiff), the A level system has stood firm against (non-existent) threats from the Abitur or indeed any other examination system.

As for defence (£41 billion – six per cent), the decisions to cut the size of our regular army to 82,000, to increase reservists, to build two aircraft carriers and to continue developing the replacement for Trident – all were taken by UK ministers and endorsed, sometimes reluctantly, by Parliament. The EU is an insignificant player in defence, and will continue to be so while its member states (with a few honourable exceptions including the UK) fail to devote sufficient money to defence it.

The Department for Communities and Local Government (£ 30 billion  – four per cent) decides how it wishes to allocate its budget to local authorities. It does not do so under instruction from an EU Commissioner. An additional £3billion (five per cent) is raised and spent locally by councils.

The devolved administrations in Scotland, Wales and Northern Ireland (£53 billion – seven per cent) are responsible for their own budgets and would no more brook interference from Brussels than they would from London.

Although the Home Secretary (£8 billion  – one per cent), Justice Secretary (£7.5bn – one per cent) and Foreign Secretary (£2 billion – 0.3 per cent) seem to spend a fair amount of time in discussions – and even the odd argument – with the EU, they are firmly in control of their own budgets.

The main commitments of the Department for Business, Innovation and Skills (£17 billion – two per cent) are research and skills funding, universities, the Post Office, the Technology Strategy Board and the UK Space Agency. It is the UK Government, with the approval of Parliament, which decides where spending should be directed – for instance, to support the Post Office network or to create the Regional Development Fund and Green Investment Bank.

The Secretary of State for Environment, Food and Rural Affairs (£2 billon – 0.3 per cent) has more to do with the EU than most cabinet ministers. The Common Agricultural Policy is a fairly inefficient way of keeping some of our farmers in business – but we would still be making an equivalent of Single Farm payments, at least to our smaller farmers, whether or not we were in the EU. Of DFID’s budget (£11 billion – 1.5 per cent), about 10 per cent is handled by the EU and the European Development Fund.  My experience of this work is mixed.  The DFID Select Committee constantly questions the EU’s aid to upper middle income countries, and should continue to do so.

Debt interest accounts for £49.5 billion (seven per cent) as we continue to borrow another seven per cent of GDP this year, ignoring the supposed three per cent EU cap on budget deficits. That is our decision.

There is, of course, our contribution to the EU budget (2013 – about £14 billion gross; £9 billion net[2] – two per cent per cent; one per cent per cent). The EU budget remains too high and we must continue the work begun last year of cutting it.

But would our public finances be very different if we were not in the EU?  It does not seem so.  A primary characteristic of being a free, independent state is the ability to set our own budget, control our revenues and expenditure and run a large deficit if Parliament so decides.  Our membership of the EU clearly does not prevent us from doing any of this.

[1] All figures are from the 2013 Budget Red Book, except where stated.

[2] ‘European Finances 2013’ (Treasury: Nov 2013). 

‘In Our Interest: Britain with Europe’, a collection of articles by 18 Conservative MPs, is published today by European Mainstream.

37 comments for: Jeremy Lefroy MP: Evidence suggests that our Government, not the EU, controls public spending in Britain

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