EU Budget Vote Spells Trouble For Cameron

Euro MPs have handed David Cameron a fresh headache by backing a 6.8% increase in European Union spending next year.

British Euro-MPs had joined forces to fight the plans for inflation-busting rises in EU spending over the next eight years.

But they were outnumbered in a vote in Strasbourg which endorsed European Commission demands for more cash.

Most MEPs supported the need for the 6.8% rise next year and an overall increase of at least 5% in the EU's long-term 2014-2020 budget.

These are both due to be agreed before the end of the year but Mr Cameron has threatened to veto any long-term spending plan that exceeds inflation - effectively insisting on a freeze.

The vote sets up a battle within the EU, and Austrian leader of the Socialist MEPs Hannes Swoboda made clear the PM faces an uphill struggle to get his way.

"If Mr Cameron threatens to use his veto, he should be aware that we can do it as well. The European Parliament is much stronger than Mr Cameron," he said.

The warning comes as the Prime Minister is under pressure from within his own party and from the wider public over Britain's relationship with the European Union.

Any prospect of taxpayers having to pay more into EU coffers, while enduring serious austerity at home, will further antagonise eurosceptic opinion.

British MEPs were outnumbered almost five to one in the vote. Leader of the Conservative contingent Richard Ashworth said: "We believe the EU simply must stop spending money its member states do not have.

"It is plain wrong to impose austerity regimes on Greece and Spain at the same time as trying to increase spending and borrowing across Europe as a whole. That amounts to economic illiteracy.

"Fortunately, the last word on this will be at the Council of the EU, where Britain has a right of veto. You can be sure there will be some hard bargaining to come."

Glenis Willmott, leader of the Labour MEPs, said: "In a time of crisis, when public authorities across the EU are cutting vital services, it seems that for Brussels it's still business as usual.

"The priority right now is to cut waste, go for growth and deliver a real-term freeze in the budget."

Liberal Democrat MEP George Lyon said: "It is vital that the EU budget reflects the hard financial times faced by all member states and therefore we want to see a more realistic budget that reflects the realities faced by ordinary people."

As MEPs voted in Strasbourg, Foreign Secretary William Hague used a speech in Berlin to insist that the EU budget had to be "in touch with the real world".

He warned: "People simply do not understand why there should be massive increases in the EU budget when all EU countries are trying to balance the books at home."

In the same address, he warned that British disillusionment with the EU is the "deepest it has ever been" and that people feel they have no control over it.

"People feel that the EU is a one-way process, a great machine that sucks up decision-making from national parliaments to the European level until everything is decided by the EU. That needs to change," he said.

"If we cannot show that decision-making can flow back to national parliaments, then the system will become democratically unsustainable."

Bulgarian MEP Ivailo Kalfin, the Socialist Group negotiator on the budget, insisted increases were the right step.

He said: "The EU budget is different from national budgets. The EU budget is an investment tool to support long-term development and strategic European co-operation.

"In fact, 94% of the EU budget is invested in the member states to create a European added value or in making sure the EU speaks with one voice on the world stage.

"It gives additional instruments to the member states and the regions that are crucial in times of austerity."