Lords Committee reports on 2010 EC Budget

30 July 2009

The House of Lords EU Committee has today criticised the European Commission’s proposals for the 2010 European Communities budget for maintaining a very high level of spending on agriculture, and failing to shift adequate resources to stimulus measures to aid economic recovery

In regard to the proportion of the budget that is spent on agriculture the Committee states that it is "disappointing in the context of the financial crises that this proportion remains so large". They go on to say that the insistence on maintaining agricultural spending is "deeply frustrating".

£51 billion has been allocated to Heading 2 (Preservation and Management of Natural Resources) of the Budget, of which agricultural spending is a significant part. In comparison, £54 billion has been allocated to Heading 1, Sustainable Growth. The Committee argues spending should be reallocated to Heading 1.

The Committee also comments on the system of multi-year ceilings on budget spending. Whilst that arrangement is useful for discipline and stability, it makes it hard for the EU to grow its spending to provide a stimulus during an economic downturn.

The report also points out that, at present, the margin between the ceiling and proposed spending levels under the Competitiveness and Growth heading is not great enough to accommodate spending as part of the European Economy Recovery Plan, as well other unforeseen expenditures.

Commenting Baroness Cohen, Chairman of the EU Sub-Committee, said:

"At a time when it is clear that Europe’s economy needs major economic stimulus, it is very frustrating that so much of the EU’s spending continues to be channelled to agricultural spending that provides very poor value for money.

"It is vital that the budget is looked at again so projects which can provide real economic and social benefits, such as investment in green technologies, are given the funding they need, while the Common Agricultural Policy spending is appropriately reduced."

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