"When one plus one equals one" - An expose of lack of 'Additionality' in EU funding
18 April 2006
Newsletter Platform Piece by Jim Allister MEP
EU funding is supposed to be additional to national spending in Northern Ireland. Article 11 of Council Regulation (EC) 1260/1999 stipulates such when it says, "In order to achieve a genuine economic impact, the appropriations of the Funds may not replace public or other equivalent structural expenditure by the Member State." This is the essence of additionality.
That is the theory but the practice in regard to Northern Ireland is shamefully different. Upon recently challenging Finance Minister, Lord Rooker, on this issue he replied as follows:-
"Your fourth point asks whether the EU funding to Northern Ireland represents additional funding to Northern Ireland or if it goes to reduce the burden on the UK Exchequer. The level of public expenditure that takes place in Northern Ireland is determined by the bi-annual spending review process for the UK as a whole and changes to Northern Ireland total spending are determined by the Barnett formula. The total amount of public expenditure available in the UK is determined by the revenue available. One of the factors determining this total revenue is the level of EU income. Other factors include tax revenues and borrowing. Northern Ireland benefits from the fact that higher levels of EU income to the UK enable higher total levels of expenditure throughout the UK including Northern Ireland."
Thus it is very clear that Northern Ireland and its needs are used as the means of attracting EU funding, but when it is received it goes directly to the UK Exchequer to the benefit of the UK as a whole, rather than for the singular benefit of Northern Ireland. EU funding, when received in the UK Exchequer, is then used to reduce the balance of UK-wide tax revenue and borrowing which is necessary to meet the UK’s public expenditure demands.
I contend that this use of EU funding does not deliver true additionality and is not how it should be deployed. I have therefore taken the matter up afresh with the Regional Commissioner in Brussels and with the Controller and Auditor General in Northern Ireland, urging them to ensure that the UK transparently meets its additionality obligations. Failure to do so involves defrauding both Europe and Northern Ireland.
The Secretary of State frequently likes to remind us of the generosity of the UK Exchequer's annual subvention to Northern Ireland. What he never mentions is that Northern Ireland is used as a conduit to get EU funds into the central Exchequer. As Lord Rooker's letter makes clear the effect of EU receipts for Northern Ireland is to reduce the amount of balance UK funds necessary to be raised by taxation and borrowing. Shouldn't the amount claimed on Northern Ireland's behalf be credited to us in any balance sheet assessment by the Secretary of State?
In considering Northern Ireland in the context of EU funding, it is also relevant to recall that the UK as a whole is a net contributor to Europe. Even with the UK rebate our net annual contribution is habitually of the order of £4billion, and rising. Northern Ireland's taxpayers play their part in funding this subsidy to Brussels and therefore it is wrong to suggest that our region is solely a net beneficiary of funding from Europe. I recently asked Lord Rooker for the figure for Northern Ireland's share of the UK's contribution to the EU but he claims that it is not calculated at the regional level. Thus, it is not possible at this stage to be precise as to how the balance sheet stands in terms of Northern Ireland's contribution to Europe as opposed to its receipts from Europe, though two things are clear; we do, through our membership of the UK as taxpayers, contribute substantially to the funding of Europe and that which we get back is not transparently additional to other public expenditure within the Province, as it ought to be.
