Cameron Reinforces EU Budget Veto Signal as Tories Revolt

U.K. Prime Minister David Cameron gave his strongest signal yet he will veto any increase in the European Union’s budget as he sought to pacify rebel Conservative lawmakers before a House of Commons debate.

Lawmakers vote today on an amendment put forward by euroskeptic Conservatives that demands a cut in the EU’s budget, highlighting splits in the party over Europe. Cameron has previously said he’ll push for a freeze in real terms in the bloc’s spending over the seven years starting in 2014, a stance criticized by some lawmakers as not aggressive enough.

“This government is taking the toughest line in these budget negotiations of any government since we joined the European Union,” Cameron told the Commons at his weekly question-and-answer session. “At best we would like it cut, at worst frozen and I am quite prepared to use the veto if we don’t get a deal that’s good for Britain.”

Cameron has been preparing for talks at a Nov. 22-23 EU summit in Brussels by saying he wants the budget to rise only in line with inflation. One of the rebel lawmakers, who declined to be named because talks are still being held in private with party managers, said more than 50 of the 304 Tories in the Commons had indicated they were planning to vote against the government today, demanding that Cameron should toughen his negotiating stance and push for a real-terms cut.

“It is in our interest to try and get a deal because a seven-year freeze would keep our bills down compared to annual budgets,” Cameron said.

Commission Proposal

The European Commission has proposed a spending package of 1.03 trillion euros ($1.34 trillion) for the years 2014 through 2020, an increase of almost 6 percent compared with the 2007- 2013 budget. Cameron has said the proposal is excessive at a time of national fiscal constraints.

“We are not rolling back wasteful public spending in this country only to see it increased in Brussels,” Treasury minister Greg Clark told the Commons at the start of the debate, appealing for lawmakers to support the premier’s negotiating position.

While today’s vote is not binding, a rebel victory would be a further embarrassment for Cameron in a month in which Chief Whip Andrew Mitchell resigned for verbally abusing police and Chancellor of the Exchequer George Osborne was found attempting to travel in a first-class train carriage on a standard-class ticket.

Coalition Agreement

A document setting out the mid-term aims of the prime minister’s coalition with Deputy Prime Minister Nick Clegg’s pro-Europe Liberal Democrats has been delayed to January, a person familiar with the matter said.

“This is not an anti-European amendment,” Tory lawmaker Mark Pritchard, who introduced the measure, said in a telephone interview. “It merely represents the view of millions of U.K. taxpayers that the EU budget should not be increased at a time of financial austerity and fiscal restraint in the U.K. which has seen family, local council and government budgets cut.”

The difficulties in restraining the EU budget were underlined yesterday as poorer countries in eastern Europe rebelled against a push to cut subsidies for farming and construction. If no agreement is reached by the end of next year, the 2013 budget would be rolled over into 2104.

The opposition Labour Party has sought to exploit Tory tensions over Europe by also demanding a real-terms reduction in the EU budget, suggesting Labour lawmakers may back the rebel Conservatives today.

‘Rank Opportunism’

Cameron accused Labour today of “rank opportunism,” since Tony Blair’s Labour government agreed to water down Britain’s EU budget rebate and supported an above-inflation increase in spending during the last negotiations in 2005.

The issue of Europe has dogged Cameron throughout his two- year premiership, as it did his Conservative predecessors. Splits over Europe contributed to the fall of Margaret Thatcher in 1990 and hobbled her successor, John Major.

Labour leader Ed Miliband taunted Cameron today about the “crimson tide” in the premier’s complexion, a refrain Miliband frequently uses to describe Cameron’s anger.

“Maybe that’s because he’s worried about losing the vote this afternoon,” Miliband said in the question-and-answer session in Parliament.

“He’s thrown in the towel even before these negotiations have begun,” the Labour leader said. “He can’t convince European leaders, he can’t even convince his own backbenchers. He is weak abroad, he is weak at home; it’s John Major all over again.”

Referendum Demand

In October last year 81 lawmakers defied the leadership to demand a referendum on Britain’s membership of the 27-nation EU, the largest ever Tory rebellion on Europe.

“In the Tory Party there are no ‘pro-Europeans’ as such; there is just division between those who are more ’euro-skeptic’ than others,” said Philip Cowley, professor of politics at Nottingham University. “Cameron is just less skeptic than some of his party.”

Cameron will use a speech in December to set out his approach to Europe. Some Tory euro-skeptic lawmakers want him to commit to a referendum on Britain’s future in the bloc. So far Cameron has only said he will seek a “fresh settlement” on Britain’s role in the EU after the 2015 election.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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