Press briefing from the Prime Ministers Official Spokesman on: WTO-G7, EU Budget and Duchy of Lancaster
World Trade Organisation-Group of Seven (WTO-G7)
The Prime Minister’s Official Spokesman (PMOS) said that Brazil, China, India and South Africa would be attending the finance minister’s meeting of the G7 this weekend to try to re-energise the run-up to Hong Kong. We had received a proposal from President Lula of Brazil to consider the possibility of getting heads of Government together in advance of Hong Kong. That would depend on the outcome of this weekends G7 meeting and on what other governments thought, but we had told President Lula that we would consult on his proposal following the G7 meeting this weekend.
Put to him that some had said that since Live 8 the Government hadn’t been very productive in terms of its G8 agenda, the PMOS said that anyone who looked at the outcome of Gleneagles, in terms of aid and the outcome of the work that Bob Geldof and others had done, understood that the agenda in terms of aid, debt relief and the broad agenda in terms of trade was in a substantially different place today than it had been at the start of this year. That was not coincidental. That was a result of the work that had been done by a combination of Government, NGOs and other interests. People should not underestimate that achievement in any way. It was not enough, we needed to do a lot more, but the agenda had moved and it had moved precisely as a result of the efforts that people had made throughout the year.
EU Budget
Asked what progress had been made on the EU budget, the PMOS said that in the past ten days we had had a chance to find out the views of a range of countries, whether it was Malta at Commonwealth Heads of Government Meeting (CHOGM) or the Baltic countries yesterday or central European countries and the one thing which was clear was that for the accession 10, above all, the important thing was to get an agreement now, not one or two years down the road. They needed that certainty and stability to plan their budgets and also they needed to be able to get at the money now. There were clearly questions about how that could be achieved and obviously concerning the size of the budget. No one was pretending that it was going to be easy. We were not coming out of this saying that we had a deal done, but we were coming out with a real sense of this determination to go for a deal in December and that was what we would do.
Put to him that therefore it was the French who were to blame, the PMOS said that he knew that was the view that some people always took but the important thing was that we had not given up the possibility of Common Agricultural Policy (CAP) reform. Equally we had to recognise that if there wasn’t an agreement this week on CAP reform then we would need to think about what our position would be. That was what we were doing. Asked if that fallback position would be a commitment to CAP reform somewhere along the line, the PMOS said that, as the Prime Minister had set out in Kiev yesterday, part of our proposal had been that there would be a mid-term review. That would hold out the possibility of reform.
He also said, however, that we should be absolutely clear about what we were proposing. We were not proposing that we gave up any of the money that we got back from the 15 original member states, in terms of CAP reform. Our rebate on that would not be affected unless there was fundamental reform of the CAP. The PMOS emphasised that for there to be fundamental reform of the rebate, there had to be fundamental reform of the CAP. We were talking about the money that went to the accession countries to help them develop their countries, to help them develop their motorways and to help them develop their infrastructure. The CBI had made clear this morning that they believed developing the accession countries was in the interests of British industry.
Put to him that we had made a huge concession on the rebate and still didn’t have a deal, the PMOS said that we had not made a huge concession on the rebate, we hadn’t changed the rebate on the CAP and we hadn’t changed the rebate on the original 15. What we had said was that we were prepared to forego a proportion of the rebate on aid to Eastern Europe. The bottom line question was very simple: Did people believe in enlargement? Did they support in enlargement? Should we pay a contribution towards enlargement? The fact of the matter was that if you looked at net contributions, Britain had paid twice the amount that France had paid since the agreement of 1984. What we would say was that this agreement would for the first time put us in the position of rough parity. That was progress not a huge concession. We as a country had said that we should help the enlargement process and that had been supported by everyone. You had to actually be prepared to step up and help. So would all the other countries who would contribute towards enlargement. We would not be alone on this.
Questioned as to what other parts of the rebate we might be prepared to forego, the PMOS said that the Prime Minister had said in June that the rebate was on the table if, and only if, there was fundamental reform of the CAP. What he was precisely not saying was that he was going to forego parts of the rebate on merely a promise of CAP reform. He is precisely ruling a line under that. We were not going to change the rebate on that part which went to the original 15 or to the CAP, or even to the accession countries. It was entirely linked to the part of the money which went to the structural fund for the accession countries.
Asked to clarify if the accession countries were still paying Britain’s rebate in terms of CAP contributions, the PMOS said that remained the case. That was precisely the point, until the CAP changed we would not change the rebate as it related to the CAP. The PMOS asked if people were seriously suggesting that we should make the accession countries pay the entire contribution, that theoretically we could claim, irrespective of their affect on their economy? That was not in Britain’s interest that the accession countries remained poor, it was in Britain’s interest that accession countries became more prosperous. That was the precise point of enlargement. You had to put your money where your mouth was.
Asked what approximate percentage that represented as some had heard 15% quoted, the PMOS said he would not get into the detail ahead of Monday when proposals would be published.
Asked if we were looking for stronger words on a mid-term review on the budget, the PMOS said that our preference was that we got real, strong movement towards CAP reform. That was our preference and remained our preference. What we had to think about was what to do if we didn’t get that preference. The Prime Minister had said that if there was a process of reform there then the rebate as a whole was on the table. If there wasn’t then the rebate, as it related to the CAP, would not be on the table. That was the distinction. Therefore if there was not going to be that then what we had to do was maintain the pressure for CAP reform.
The question that people had to ask themselves was if that pressure was more likely to maintained if we did a deal that helped the accession countries get their money quicker so that they could raise the standards in their countries, or was it more likely to be done in a situation where there was not a deal and people were looking around to see who was to blame. Our view was that it was in Europe’s interest that the accession countries grew richer, faster and therefore it was right to do a deal now. It was also in Britain’s interest because it opened up new markets which created jobs in Britain.
Asked if the Prime Minister felt encouraged by the mood we had been getting from the countries we had spoken to over the last few days the PMOS said that he couldn’t speak for other countries. In terms of where we were, the UK had to be hard headed about this, we had to recognise what was in the interests of Europe, what was in the interests of Britain and separate out what we would wish from what is achievable. Others in Europe, in the accession countries had to be equally hard headed and recognise that they faced difficult choices. They had to distinguish between what was theoretically possible and what was realistically possible. They had to decide what was actually in their interests in terms of whether it was in their interest to postpone the possibility of a deal and therefore postpone getting the money for one or two years, or was it in their interest to get the money now and to have developed ways that ensured they could get the money faster and spend it effectively in the near future, not the long term future. These were hard headed decisions that we all had to take. What we were doing was the right thing in terms of giving people the opportunity to make the choice.
Duchy of Lancaster
Put to him that it was a month to the day since John Hutton had been made Secretary of State for Work and Pensions and his original post of Duchy of Lancaster still hadn’t been filled, the PMOS pointed out that if journalists looked back over the last month it had been a rather eventful period and the Prime Minister had had one or two things on his mind. Of course we needed to push forward the work in the Cabinet Office and it was important work. When the Prime Minister did make his appointment that would be reflected in his decision. Asked if in the meantime we could give a salary to Minister for Women Meg Munn, the PMOS said that here position remained as it was.
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