EU budget vote: what does everybody want?

European Central Bank ECB

Labour is expected to join Tory rebels in voting for a cut in the EU budget, but the UK could end up paying more anyway...

LAST UPDATED AT 12:53 ON Wed 31 Oct 2012

THE GOVERNMENT faces a rebellion tonight when MPs vote on whether the UK should demand a cut in the European Union's budget for 2014 to 2020. Prime Minister David Cameron wants to force the EU to freeze its budget, while rebel MPs want it reduced. The outcome of the vote will have a bearing on the EU budget summit on 22 November as it would be difficult for the PM to ignore the will of parliament during negotiations with other EU nations.

WHAT DOES THE EU WANT?
The European Commission has proposed a 5 per cent increase in the EU budget to €972bn for the period between 2014 and 2020.

WHAT DOES CAMERON WANT?
David Cameron wants a real-term freeze in the EU budget, which would allow it to increase in line with inflation - just over 2 per cent. This would take the EU budget to €886bn, according to The Guardian. MPs will vote on this issue tonight following a debate in the House of Commons.

WHAT DO THE TORY REBELS WANT?
Conservative MPs led by Mark Reckless have tabled an amendment calling for a cut in the EU budget – and for the PM to veto any agreement that fails to accept one. Forty Tory MPs are officially planning to rebel and at least another 12 are expected to join them, according to The Daily Telegraph.

WHAT DO LABOUR WANT?
Labour is expected to vote for a cut, pointing out that Europe has already called on austerity-hit eurozone members to cut their own budgets. While this would suggest the Reckless amendment stands a good chance of victory, Paul Goodman on ConservativeHome says the prospect of voting alongside Labour will prompt some Tory rebels to think twice about opposing the PM.

IS AN EU BUDGET CUT LIKELY?
According to the BBC's James Landale, officials in Whitehall privately believe a cut is "implausible" and, furthermore, "securing a real terms freeze would be unprecedented and a huge victory in itself". There are 26 other countries in the EU and any of them can veto the new budget. Many countries receive generous subsidies from the EU; 80 per cent of the budget is accounted for by agriculture and cohesion funds - effectively aid for Europe's poorer regions. The BBC points out that "France is especially keen to maintain agriculture spending, while cohesion is a big issue for the ex-communist countries in Eastern Europe". However, the UK might find a supporter in Cyprus, which is chairing budget negotiations and has called for a €50bn cut.

WHAT HAPPENS IF NO EU BUDGET IS AGREED?
If there is no agreement - for example, if Cameron wields his veto - the UK could end up paying out more to the EU anyway. In the event of a failed summit, the budget would be calculated using the previous year's figures plus inflation of 2 per cent. · 

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"Paul Goodman on ConservativeHome says the prospect of voting alongside Labour will prompt some Tory rebels to think twice about opposing the PM"

And right into the hands of Labour who can claim to the electorate that they learned their lessons and are keen to cut back, but not too quickly.

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