Richard North, 05/06/2004  

This is an unavoidably lengthy but important piece which lifts the lid on the murky world of Tory MEP finances and their membership of the federalist EPP group in the European Parliament. Readers are enjoined to tell as many people as possible about this piece, and are more than welcome to copy it and distribute it freely.

Charles Moore in today's Telegraph op-ed wants to vote Tory in the Euro-elections, but fears they deserve a bad result click here.

This is an interesting observation, his sentiments underlining the salient fact that, if UKIP do well, it will not be so much because of its skill in campaigning – and certainly not because of its policies (it doesn't have any worth talking about) – but simply because the Tories have abandoned the field to them.

Not least, Moore points up the misjudgement of the Tories in agreeing to continue the alliance with the European People's Party (EPP). This European Parliament political group, writes Moore, "believes in 'developing the EU into a political Union'. It wants a 'federal Europe' (albeit a 'decentralised' one). It supports co-ordinated taxation across the EU, and opposes national immigration policies".

"It calls for the institution of a European public prosecutor, and for political oversight of European policing by the European Parliament. It says that schools should teach a 'European civic spirit'. All member states must join the euro, it says, and a Common Foreign and Security Policy must be fully integrated into EU structures, with the European Rapid Reaction Force as its 'armed component'. The EPP supports the ratification of the European Constitution for 'the good functioning of the enlarged Europe'".

Speaking for what is undoubtedly the majority of people in this country, Moore then writes, "I don't want any of these things. In fact, they are an almost comprehensive list of the things I don't want."

With judicious even-handedness, he adds, "No blame attaches to the EPP for these policies: they are the natural views of a party which has always supported ever deeper European integration. It just seems strange that the Tory party should be teaming up with this lot."

Then he comes to the meat: "Ask more questions, and it gets stranger still. It turns out that the Tories had the opportunity to lead a new political grouping at the European Parliament which would have included parties from the new member states such as Poland, and would have been Atlanticist and Euro-sceptic. This party would have been the third largest in the parliament."

"But these negotiations were dropped, and instead the Tories made a new agreement with the EPP. The idea is that the Tories can sit and vote separately, but they get all the taxpayers' money which the European Parliament doles out for staff, research etc, through the EPP. The EPP skims a percentage off to campaign for europhile causes - things like a 'yes' vote in the Swedish euro referendum - and gives the rest to the Tories."

"Some Tories think all this is very clever. Others think it is a necessary price to pay for 'the deal', a pact, they whisper, between Mr Howard and his old Cambridge friend Kenneth Clarke to maintain peace between Right and Left in the Tory party."

"But for the voter, it produces a political party which makes Euro-sceptic noises, but takes europhile money, says it opposes the Constitution and the euro, but links up with one of their biggest promoters."

Herein, though, lies a story which has yet to be told, which demonstrates how devastatingly crass the whole EPP saga has been. It is a story about money, power and influence – but mainly about money.

Poorly understood by outsiders, European Parliament political groups are the driving force in the parliament, dictating the agendas, organising the voting and generally running the business of the parliament through the "conference of presidents", made up from the leaders (presidents) of all the different groups. The groups are also the prototype European political parties, much encouraged by the EU as a means of sidelining national parties and furthering political integration.

To promote their development – and this is the crucial point – the parliament is extremely generous in funding the groups, providing an income stream entirely separate from, and additional to the MEPs' own personal expenses and allowances. Unsurprisingly, the groups are extremely reluctant to give details of the extent of this largesse, and do not produce public accounts. But we do know that the budget of the smallest group in the EP (the Group of European Democracies Diversities – EDD) has an annual budget of about one million euros annually, say about £650,000.

This has allowed the eighteen MEPs of the EDD to secure additional staff, roughly in a ratio of 1:3, just over 40 staff. Thus, each MEP benefits from an additional three workers, over and above those they fund from their own secretarial allowances. Furthermore, these workers, based in Brussels and provided with full office facilities, come with their overheads paid, so the group funding is actually worth more than the bottom line figure.

By contrast, when I last enquired, the Tory group in the EPP, with twice the number of MEPs as the whole of the EDD, had a group staff roll of just seven people – when on the same ratio as the EDD, they could be entitled to up to over 100, depending on precisely how they spent their money.

Actually this is possibly an over-estimate as group funds are not disbursed in direct proportion to the size of the group, but on a sliding scale, the smaller groups getting a larger per capita allowance. However, there can be no dispute that the Tory component within the EPP qualify for very close to – if not over - £1 million a year of group funding, of which very little actually goes anywhere near the Tories, being absorbed in the EPP global fund.

On the face of it, therefore, the Tory MEP group is giving away something close to £1 million a year to a Europhile, federalist group, which uses the money to pursue an overtly federalist agenda. This is not what most Tory voters expect – and it gets worse.

One thing UKIP has arranged extremely well is the pooling of its MEPs’ secretarial allowances – roughly £105,000 each, annually. With minimal amounts taken for their own personal staff, they use the rest to finance party staff working to the common agenda. Each of the Tory MEPs gets the £105,000 but they pay only a small subvention to Tory Central Office for central services, and pocket the rest, to spend as they wish.

With 36 MEPs, that sum collectively amounts to £3.8 million a year - or £19 million for the full five-year parliamentary term. Allowing the MEPs even to keep a fairly generous fifty percent of their allowances, and pooling the rest, that leaves £1.9 million - £2 million in round figures - a year. Add the group funding of approximately £1 million and the Tory group could marshal something like £3 million a year. The obvious outlet for that money is to spend it on policy research and development – the crying need in the Conservative Party – and a perfectly legitimate way of spending the money.

To put this in perspective, the Conservative Party is paid £4 million a year from public funds for the function of policy research and development – the so-called "short money". Clearly, this is not enough, and another £3 million a year would make a powerful addition to the fund. Furthermore, with the Party currently admitting to a £2.5 million overdraft, the EP money would make a sizeable dent in the deficit.

In short, therefore, the Tory group – in continuing to cosy up to the EPP – is throwing shed-loads of money down the drain, money which is vitally necessary for the Party to expand its woefully inadequate research function. In fact, it is worse than that. It is giving money to the "enemy". Thus, Mr Moore may want to vote Tory but, as he admits, Mr Howard's Party is not making it very easy for him. Actually, he understates the case. A vote for Tory MEPs at the moment is the equivalent of writing a very large cheque for federalism.

They do indeed deserve a bad result.

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