Nick Clegg accuses Labour of dishonesty over EU budget vote

http://www.guardian.co.uk/politics/2012/oct/31/nick-clegg-europe-vote-labour

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Nick Clegg on Wednesday accuses the Labour leadership of behaving in a dishonest and hypocritical way as Ed Miliband prepares to instruct his MPs to join forces with Tory eurosceptics to vote in favour of a real-terms cut in the EU budget.

As Downing Street served notice that David Cameron is prepared to wield the British veto to ensure a less severe, real-terms freeze in the budget, the deputy prime minister attacked plans by Miliband, Ed Balls and Douglas Alexander to side with the Tory rebels.

"Their change of heart is dishonest, it's hypocritical," Clegg said, "It's not the behaviour of a party serious about government."

The Labour leadership has held an intense debate about whether to side with the Tory rebels in the Commons on Wednesday because the party is acutely aware that it will be open to charges to hypocrisy. Alexander was Europe minister during the last EU budget negotiations in 2005, during the UK presidency of the EU, when Tony Blair agreed to water down the British rebate and brokered an above-inflation increase in the overall EU budget.

Labour will also be aware that François Hollande, the French president who broke protocol to allow Miliband to be photographed with him on the steps of the Élysée Palace, will be furious that Labour is adopting a position on the EU budget that is even more hardline than the coalition's stance.

But Labour's leadership was planning late Tuesday to instruct its MPs to vote with the Tory rebels, led by the backbencher Mark Pritchard, who want the PM to go further in the EU budget negotiations and demand a real-terms cut in the budget. "How can we resist," one senior Labour MP said.

Balls, who wrote a joint article with Alexander in the Times on Monday outlining the case for a real-terms cut in the EU budget which should then be refocused on promoting jobs and growth, has been pressing for Labour to side with the Tory rebels. The government said that Balls was repeating a pattern of behaviour after he led Labour MPs to vote with Tory rebels in July 2011 against a £9bn increase in Britain's IMF contributions to help the eurozone bailout.

Labour's decision to side with the rebels, who claim to have around 50 supporters, has raised the prospect of a government defeat when MPs vote this afternoon. But Downing Street is hoping that Labour's "brazen" approach will deter many eurosceptics from being seen in the same division lobbies as Balls.

No 10 aides are also hoping that there will be strong support from an amendment that is being tabled by the Tory backbencher Jacob Rees-Mogg. This says that Cameron should veto the budget negotiations if Britain fails to secure a real-terms freeze in the budget.

Clegg, who took part in a cabinet discussion on the EU negotiations on Tuesday, outlined the government's approach on the budget negotiations that will take place at a summit in Brussels, due to open on 22 November. "We will not accept an increase, above inflation, to the EU budget. That is a real-terms freeze. And we will protect the British rebate in full."

The deputy prime minister contrasted the coalition's approach with Labour in government. "Labour has now taken a different position – having had a change of heart. Yet it was Labour who agreed to the last long-term EU budget settlement which saw a major jump in EU spending and lost part of the UK's rebate in exchange for virtually no real EU spending reforms.

"British taxpayers have suffered the consequences ever since with our net contributions more than doubling from £3bn in 2008 to £6.9bn in 2012."

Downing Street made clear that Cameron is prepared to allow the negotiations on the EU's next seven budgets, which will run from 2014, to drag into next year if his demands are not met at the EU summit later this month. Cameron is opposed to the European Commission's proposal for a 5% increase in the budget, taking it to €972bn. He wants the budget just to rise in line with inflation – currently just over 2%. This would limit the budget to €886bn.

A failure to reach agreement by the end of this year will make it more difficult for the European Commission to make spending plans for the 2014-2020 budget period. If no deal is reached by the end of 2013 then existing "budget ceilings" are carried over on an annual basis, raising the prospect of a more costly budget.

The prime minister's spokesman said: "We need to be realistic about the upcoming council. It is not going to be straightforward to reach agreement."