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Wednesday, March 23, 2005
Press summary: Wednesday 23 March

All the newspapers report figures, released under the Freedom of Information Act, that reveal the Common Agricultural Policy subsidies paid to some of the country's richest people. The biggest landowners - including members of the Royal Family, dukes and agrifood companies - receive millions of pounds a year from the European Union. Tate & Lyle tops the corporate league with more than £127m a year and the Queen received £545,897 last year.

The Times leader describes the CAP as "an obscene arrangement" which inflates the annual food bill for a family of four by £600 and urges the Prime Minister to "highlight the monstrosities of the CAP on every occasion." The Guardian leader says: "Europe needs a long-term programme to phase out subsidies completely and to use part of the money saved to manage the countryside in the interests not only of the farmers." (The Times, article p4, graphic, leader p17; Guardian, article, leader)

Comment: In the Bumper Book of Government Waste 2005 (p15), the TPA calculated that Britain gives over £1.9bn a year to overseas farmers. Britain's net contribution to the EU budget is currently £4,300m a year. About 45% of the EU budget is allocated to the Common Agricultural Policy (CAP), which means that £1,935m of our net contribution went to subsidising farmers in other European countries, including £88m for tobacco farmers.

A top Treasury official revealed to a private meeting last week that it is transferring as much as £138m every fortnight to the EU. Chris Austin, the official who oversees the Treasury's European union finances, revealed the figure at a private meeting of the Federal Trust held in the offices of the European Parliament in London. He also said that since 1984 Britain has contributed £58bn - more than France (£29bn) and Italy £17bn) (Telegraph, p22)

In her Business Editor's Commentary for The Times (p41), Patience Wheatcroft leads on the Chancellor's public sector pension liabilities "time bomb". She reports that, when questioned by MPs yesterday, the Chancellor stuck to his December forecast of the cost rising from 1.5% of GDP in 2003-04 to 2.2% in 2053-54. Since the government suspended its plans earlier this week to raise the retirement age from 60 to 65, having been threatened by 1.5million public sector workers going out on strike today, these figures are now out of date. They were based on calculations that reflected the mid-point between retaining the present rules and raising the pension age to 65. Now the reforms have been suspended, Wheatcroft says the figures are more grim.

Speaking to MPs yesterday, the Chancellor dismissed accusations that the Treasury coerced the Office for National Statistics to adjust official data to give a £3bn boost to public finances (The Times, p44; Guardian, report)

The launch of the Economic chapter of the Conservative manifesto is covered in many of the newspapers. Michael Howard pledged match the Budget "sweeteners" announced by Gordon Brown last week and make additional tax cuts of £4bn in its first year (Daily Telegraph, report)

Labour's private polling figures suggest that 66% of voters do not believe that the Tories would be able to find £35bn in savings from waste in public services if they form the next Government (Independent, report)

Comment: A YouGov poll for the TPA last week found that over half of voters - 52 percent - believe that the Government wastes more than £20 of every £100 it spends overall. With public spending forecast to top £520billion in 2005/06, this suggests that the majority of voters believe that the Government wastes over £100billion each year. It is worth noting that a European Central Bank report estimates Government waste in Britain to be as high as £83billion each year.

Martin Wolf argues in the FT that higher government spending does not lead to lower economic growth (Financial Times, opinion)

Posted by Matthew Elliott | Permanent Link

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