The Guardian view on the European Union budget demand: messing with the national interest
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Version 0 of 1. There are two sensible things to say about the UK economy’s third-quarter growth rate of 0.7%, announced today . The first is that it shows the economy is continuing to grow at a solid level. The second is that the rate of growth is down compared with the revised 0.9% in the second quarter. This slowing ought to bring a cautionary note to the current smugness of the domestic economic debate. But it is unlikely to do so. Today, George Osborne boasted that, with annual growth up to around 3%, Britain is leading the G7 pack and said that the recovery is broadly based. In a few weeks’ time, when he delivers his autumn statement to MPs, Mr Osborne will trumpet more loudly the fact that Britain’s recovery has been even stronger than he first forecast in the budget. Thanks to a recent revision of real GDP growth figures by the Office for National Statistics, the UK’s recent level of economic performance now looks better than it did. With the general election looming, the chancellor will undoubtedly seize on all these much-improved figures to burnish his economic credentials and as supporting proof for his deficit-reduction strategy. It is possible, indeed, that the argument may win the Conservatives the May election. It is extremely important to keep all this firmly in mind when considering the furore over the EU’s demand for Britain to pay a further £1.7bn into the European budget by the start of December. The statistical revisions whose consequences are causing so much consternation to the Conservatives in the European context are in fact the self-same revisions whose effects they will cheer to the rafters when the chancellor delivers his pre-election autumn statement in December. In both cases, they are the product of the same mechanical statistical exercise. So in that sense it is no more valid to pretend that the EU budget effect of these revisions is proof of the wickedness of Brussels than it is to pretend that the UK GDP effect of these same revisions is proof of Mr Osborne’s wise management of the British economy. Both these claims are old-fashioned opportunism. The extra budget demand from the EU appeared to take ministers by surprise. David Cameron’s outrage at the EU council meeting in Brussels yesterday seemed genuine. A meeting of finance ministers was hurriedly called. Yet why should this be so? The process of statistical revision has been well understood across Whitehall for years. The ONS published a report at the end of May which could not have been clearer about the umbilical connection between the revisions and the calculation of an EU member state’s budget contribution. The political sensitivity of anything to do with the EU in an election year – never mind in the runup to a byelection whose result could reshape British politics – goes without saying. Treasury officials cannot have been unaware of all this. Ministers must have been aware too. So the impact on UK domestic politics and on relations with the UK’s EU partners was entirely foreseeable. It was also of the highest importance to the national interest that it should be well-handled. Action to head off the confrontation and to draw its sting could – and should – have been taken. Yet it was not. Why? There are only two possible answers. Either Mr Cameron’s outrage was synthetic and cynical, in which case he positively wanted yesterday’s furore as an opportunity to portray himself as a strong anti-European. Or he and his ministers and officials were asleep on the watch and let it catch them unawares. It is hard to know which is worse. The national interest was at stake. For someone who has staked so much on reshaping Britain’s relations with the EU this is an extraordinary state of affairs. When Mr Cameron made his keynote Europe speech in 2013 it was possible to argue that he was seeking EU reform and a UK referendum as a leader who grasped the importance and desirability of restoring confidence in Britain’s European membership. Since then, he has done little to make that possible. Instead he has made it ever more difficult to win the allies, secure the changes and win the vote. Increasingly, Mr Cameron seems more concerned with out-Ukipping Ukip than with defending and advancing Britain’s place in Europe. This is our country he is messing with. What on earth does Mr Cameron think he is up to? |