Government slams EU budget increase

Euro-MPs were slammed by the Government today for backing an inflation-busting euro budget in the face of growing demands for belt-tightening in line with national austerity plans.

A European Parliament committee has more than doubled the inflation-only increase of about 2% which many EU governments insist is the most the EU should expect in the midst of the economic downturn.

Ministers are furious that national exchequers across Europe are slashing domestic budgets - but under pressure to shell out more than ever as their contribution to EU spending.

The scale of the proposed rise only become clear today after European Parliament number crunchers finished their calculation following a vote two days ago - just as just as William Hague was telling the Tory conference that the battle to keep EU costs under control was being won.

The contentious vote of the European Parliament's Budgets Committee not only endorsed the European Commission's original demand for a spending increase next year of 4.9%, but went further in demanding hikes, pushing the budget increase to 5.23%.

The figure would add £5.7 billion to annual EU spending, pushing the total budget to £114.9 billion for 2012.

A UK Government spokesman said this afternoon: "In July, we and other EU member states agreed to more than halve the growth in EU spending proposed by the Commission in its draft 2012 budget.

"In such challenging economic conditions, high growth in EU spending is both unaffordable and out of kilter with the tough measures that many countries are taking to consolidate public finances."

He added: "It is therefore very disappointing that the European Parliament wants the EU to spend even more than even the Commission had proposed. We hope the Parliament's final position, to be voted on later this month, will show greater moderation and responsibility."

Last December Prime Minister David Cameron and his French, German, Finnish and Dutch counterparts signed a letter demanding curbs in EU spending, limiting any increase to inflation - a real-terms freeze.

Foreign Secretary Mr Hague told the Tory conference on Wednesday: "When we said that the costs of the EU budget were out of control we were right, and now we have had unprecedented success in bringing it under control."

The next step is another vote of MEPs on the Budgets Committee next Tuesday and a vote of the full European Parliament on October 26.

The issue will then be challenged formally by EU ministers in a bout of wrangling likely to last for the rest of the year.

The European Commission has insisted that the comparison with national government cutbacks across Europe is inaccurate - saying the EU budget must be big enough to carry out the policies required of it by the 27 member states.