23/11/2012 Daily Politics

Welcome to the Daily Politics. Today's top story... David Cameron

tells European leaders they must accept cuts to the EU's proposed

budget for the next seven years, as the Brussels summit goes into its

second day. But with 26 other prime ministers and presidents pushing

their own agendas, can any agreement be made today, or could

the whole thing get kicked into next spring? Back home, the

Government outlines its vision for Britain's energy policy. It looks

like you will be footing the bill. And what really goes on at a

European summit? Adam has an inside guide to the inner workings of the

All of that coming up in the next hour. With us for the duration,

Pippa Crerar, political correspondent at the London Evening

Standard, and Iain Martin, who writes for the Telegraph. Pipette

is heading off to India with Boris Johnson - what could possibly go

wrong?! Money well spent! Let's start with energy. The government

has finally announced what it's going to do about keeping the

lights on and emissions down and it's something of a compromise. An

estimated �110 billion is needed in the next decade to renew the UK's

ageing electricity infrastructure, with much set to go into low-carbon

power sources like wind farms and nuclear power to cut emissions. But

no decision has been taken about setting carbon emission targets for

2030 - this has been delayed until 2016, after the election. This

morning, the Lib Dem Energy Secretary, Ed Davey, has been out

defending his plans. No one is losing out, this is a win-win. Not

just for the coalition, for the country. We are having to take

tough decisions in this government, but the Liberal Democrats are

determined to play our role, to make sure we get the investment,

growth and green jobs, and today is delivering on that. There was a

huge tussle between the Treasury and Ed Davey's department. He can

tell when a politician is being slightly disingenuous, when he

describes something as a win-win situation for the country. There

has been a vicious row between Osborne and Ed Davey' department.

The Treasury really thinks it has won, that it has won concessions,

the Lib Dems have conceded there won't be those targets on

decarbonisation bike 2030. However, wind power sceptics will say the

government is still increasing the subsidy by a fairly large amount.

Do you think it is strange politics, given the rise in energy bills is

hurting everybody, but particularly those on average and below average

incomes, to come up with a plan that's going to add, it's hard to

tell the figure, about �110 to a bill. Yes, depending on who you

listen to. Ed Davey describes it as a win-win, others might describe it

as a Blues lose, because you have consumers who are very sceptical of

the big energy companies acting as some sort of cartel, they are

facing energy bills going up and having a lot of other expenses to

deal with. �180 may not seem much to some people but for people

dealing with cuts across the board and having to tighten their own

belts, it is. Green groups are also going to be unhappy about it.

They've picked the carbon tabards into the long grass after the

election. You wonder a compromise in which the only people are the

big energy companies who are taking over from the banks as popular hate

figure number one. The spokesman for the big energy companies

recently left from her job being spokesman for the banks, which is

rather convenient! The other difficulty for the government is

the week began with the Prime Minister saying we are in an

economic war, this was like May 1940 in economic terms. If that's

the case, the priority should be cheaper energy prices to fuel the

recovery, rather than increasing prices. One of the things Ed Davey

said this morning, and they say it all the time, this will mean

thousands of new jobs created in green energy. What he never says,

what they never tell you, is how many thousands of jobs will be

destroyed by higher energy prices for the rest of industry. For

example, the aluminium industry in this country no longer exists

because energy is too expensive. What will be next? The �180 we've

talked about is the up of and of 7.6 billion overall for the energy

companies. They are really delighted that they can have some

certainty... We are guaranteeing their capital investment as

consumers. The that is pretty much it. I'm sure there will be lots of

consumers who aren't happy about that. I have a sense this story

isn't going to go away. I suspect the compromise deal won't unravel

but they will be a lot of nit- picking of it from both sides. Now

it's time for our quiz, and it's been reported today that many MPs

are embarking on lavish, all expenses paid, fact-finding trips

abroad. The Independent says the trips cost more than �1.5 million,

paid for by foreign governments, pressure groups and companies over

the space of two years. But we want to know - which of these

destinations hasn't been visited by Sri Lanka, China, Cayman Islands or

Sandy Island in the Coral Sea. Later in the show, Iain and Pippa

will give us the correct answer. Now, another day, another shirt. EU

leaders have resumed talks in Brussels aimed at setting a budget

for the next seven years, to 2020. Divisions remain over whether

spending should be increased or reduced. This morning EU officials

warned European leaders against seeking to delay any budget deal

until a further summit next year. Aides to the EU Council President

Herman van Rompuy say the facts will not change by delaying summit

negotiations. Yesterday's talks opened with van Rompuy suggesting a

seven year budget of 940 billion euros - a big enough reduction that

could maybe allow David Cameron to claim some sort of victory. The

latest proposals see 460 billion euros for smart and inclusive

growth, including the cohesion fund that goes mainly to poorer

countries. The cohesion fund has been topped up by 11 billion euros

on original budget proposals in an attempt to appease countries such

as Italy and Poland. There's 372 billion euros on the table for

sustainable growth, which includes 278 billion for the direct farm

payments and market measures, taking in the Common Agricultural

Policy. This has been increased by 8 billion euros on the original

proposal in an attempt to appease the French, but still represents a

cut on previous years. Van Rompuy has suggested that the global

Europe fund, which includes development aid and the diplomatic

service, be trimmed by 6 billion euros to 61 billion. And that 5

billion euros be lopped off the Connecting Europe facility used to

fund cross border infrastructure. But the administration budget

remains at 63 billion euros despite proposals from the UK for reducing

it. This is what the Prime Minister had to say on the way in to another

day of negotiations. There really is a problem in terms there hasn't

been the progress in cutting back proposals for additional spending.

It isn't it time for tinkering, it isn't it time for moving money from

one part of the Budget to another. We need an affordable spending cut.

That's what's happening at home, that's what needs to happen here.

The Prime Minister looking quite fresh despite a late evening and an

early start. Gavin Hewitt joins us now. Where are we this morning?

you've just heard, David Cameron arrived this morning and he is

still not happy. He believes that all that happened last night was a

shuffling of the pack. A little bit more to the Common Agricultural

Policy, to appease the French, a little more to cohesion funds to

help Poland and those other countries in central and eastern

Europe who say that currently the proposal is unacceptable. But what

the British are insisting on, not just that some of the

administration costs should come down, they want to see that overall

figure, the 940 billion euros. They want to see that come down. Will

they achieve that? It's going to be difficult. Lots of pessimism on the

way in here. One of the things that Britain needs to be careful about.

It has two strong allies in this - Sweden and the Netherlands. Watch

out for an attempt to try and ease them away. For them to be more

willing to compromise and therefore leaving David Cameron more exposed

on his home. If the summit was to pass or to agree, be getting the

distribution of it, the total sum in the Herman Van Rompuy budget,

could Mr Cameron claimed that as a victory, because it's tens of

billions more than he has been saying and it is not a real-terms

freeze? He could claim it is something of a victory. The

original proposal was way above eight trillion. Then Herman Van

Rompuy came in, he lowered that by 80 billion. We are now stuck with

940 billion. But when the Treasury set out what its target was, it was

significantly below that, about 886 billion. On the other hand, if you

look at the spending limits, the spending ceiling in the proposal,

you could claim there was actually a small cut compared to last time.

In the way that many things are done here, after all, this is a

city known for fudging things, you could walk away and say there has

been some success here. In terms of those overall figures, I think some

people would turn around and say, if the British accepted 940, they

would say, well, a little bit of success. But in the end, it's not a

freeze in terms of the actual spending. That's the difference.

You can try and freeze the ceiling or try and freeze what is actually

going to be spent. If we had to settle, if the British had to

settle on 940, bed be plenty of those saying that is not a freeze

on money spent. And we've been joined by the Shadow Europe

Minister, Emma Reynolds, and Conservative MP and former

If he settles for that as a budget, will you back that? We will await

the outcome of the summit. This is a long and difficult set of

negotiations. We appreciate that, we know it's not an easy challenge

for the Prime Minister, but we do think it is doable. Sweden and the

Netherlands are allies. If David Cameron had perhaps hit the bones

and talked to Capitals earlier, he might have got Germany and some of

the other contributor states on side, too. But you voted for a

real-terms cut in the Budget. This is not even a real-terms freeze

that is being proposed. Would you accept that? We are going to see

what happens. We can't prejudge the outcome. I know it's a hypothetical

question but it's a reasonable one. If Mr Cameron settles for a modest,

real-terms rise in the Budget, a modest one, would Labour support

it? It will depend if there is any change to a rebate. It will depend

on the shape of the Budget. We will look closely at what the

negotiations, how they proceed. We will judge the outcome when... If

we get an outcome this time... voted for a cat. We would like that.

We will wait to see what he comes back with. What would you settle

for? There will be lots of different things attached to this

with the rebate. But we voted to have, at worst, a cut, a cap on

inflation. Many of us would like to see a further cut. It's the art of

what is possible. A further cut is not on the agenda. The knot at the

moment. Not on the agenda, period. At the moment. One of the things

the Prime Minister is arguing for is to reduce the running costs of

the EU. We are spending �45 billion just on running it. I understand

that but let's get real. This is a budget for the next seven years.

There is nothing on the agenda for Mr Cameron other than a cut. But if

it boats for something along these lines, it isn't for seven years. A

real-terms cut is not on the agenda. This is a budget for the next seven

years with the adjustments that can happen on a year-by-year basis.

We've got to get the best possible deal we can now. That is what the

Prime Minister is batting for Britain on. We've got to maintain a

rebate, and we don't get any losses on that front. What is the minimum

Mr Cameron has to bring back for you to vote for it? It will be a

complicated package. We need to see real signs that the EU is cutting

its running costs. That we are spending money most efficiently,

rather than on running the EU. This has been a problem. People in this

country don't see where this money is going in our interests. We've

got to get real. We've had years and years under the last government

of above-inflation increases. The last government also gave away our

rebate, which has been negotiated back by Mrs Thatcher. Half of it.

Here we have somebody who's not going to give away any more of the

rebate. The original purpose of the rebate was because Britain didn't

benefit very much from the Common Agricultural Fund. Nothing's

changed. Hold on, it's changed enormously. When I first started

covering these matters, the CAP accounted for 82 % of the European

budget. Under the new proposal it will be down to 40 %. You can't say

nothing has happened. The argument was that, as the CAP went down as a

percentage, so Britain's rebate There are so many areas where

Europe has increased its influence in how we run the government in the

UK. We are paying for things and constituents cannot see the benefit

to this country and they certainly cannot see the benefit of paying

�45 billion to pay 35,000 people working for Europe. The BBC

probably employs more people than the Royal Navy! That is another

matter altogether. Can we really afford to fund such a big

institution that does not have such clear benefits to the United

Kingdom? Our biggest gripe is the cost of running the institution of

the EU as well as what the money goes on. What do you make of that?

It is around 8% of the Budget. What matters is how the structural funds

are spent and in some areas they are spent very well and lead to job

creation, and in other areas not so well, so we would like to see a

budget that delivers job creation and growth across the EU but

especially in the newer member states. What makes you think that a

budget overhaul, that accounts for 1% of GDP, and the structural fund

Bobby a lot less, will make a blind bit of difference to European

growth -- will be a lot less? small stake like Slovakia, the

structural funds are significant in their economy. I understand if you

put a lot of money into a small country, it may make a difference.

But in what way will the structural funds make a blind bit of

difference to Europe's growth? member states have a much lower

standard of living than others and it makes sense for us all that

there is a better equilibrium, so we get less migrants, a few are

migrants, Surrey, and the structural funds in some of the new

member states make a real difference -- fewer migrants, I'm

sorry. I understand that but I am not sure how it will affect

European Growth. It is a small part of GDP. It sounds to me like David

Cameron is in trouble. There is a head of steam building up around

the Herman van Rompuy suggestion, which is less than the European

parliament would like but is still considerably more than David

Cameron said he would get. He will also be under pressure from the

Foreign Office to sign up to a deal. They will take their realpolitik

view that this is the best you will get so go for it. But if Cameron

says, I have got a deal, and comes back to London and Labour are not

happy with it and Euro-sceptic Tories are not happy with it, it

could be defeated in parliament and that is his worst nightmare, that

he ends up as a prisoner of his party. It is still not certain that

they will get a deal. Angela Merkel and Francois Hollande, if they say

no, the worst-case scenario will be at the end of 2013 we could have

the budget forced on to you, and the Prime Minister looks completely

out of control, as though he has not had any say in it at all to

what he should hoped to achieve is a deal, not least to keep his

backbenchers at home happy because there will be a lot of unrest

otherwise. I don't see from these figures how we will do that but we

will see. We have been enjoying your company so much and by popular

demand, we are holding you hostage. It has been 37 years since the UK

has had a referendum on Europe and ever since he became Prime Minister,

David Cameron has been under pressure to hold an in or out

referendum. But if the UK did opt to get out of the European Union,

what kind of relationship could it A little bit of European flavour at

a Christmas market but no, this is not a German one, I am at London's

south bank's Winter Festival, not too far away with a place that has

had a choppy relationship with the European Union. There has been many

a backbench rebellion about Europe over there. It could be enough to

10 you to drink. -- enough to turn you to drink. There is nothing

Swiss here but we do have a chocolate fountain, which brings me

to Switzerland. It dips into the EU, making deals on bits it likes, but

it has been frozen out in the past for not signing up to legislation.

This Tory Euro-sceptics says it is the best model. Switzerland retains

its democracy and makes its own laws. It enters into a series of

bilateral agreements with the EU and has access to the single market,

but only a token contribution to the EU budget and I think that

would be a lot better for the UK. What about Norway? Norway's

relationship is different, it is a member of their economic area so

its citizens have the same rights to go across the EU and work as

other member states, but without some of the bits that it doesn't

like. Some critics warn that the UK not to try the Norwegian model

because Norway's still pays a lot into the EU and has signed up to

most of its laws, despite not being able to influence them. We are out

so politically so it is integration without representation. We are not

represented. Many of the issues I think a controversial in the

British EU debate, like the social dimension, justice and home affairs,

most of these are in the Norwegian model, so you will not really

escape those things for. What about trying a new flavour altogether?

Wants a Labour pro European, this German-born MP now wants the UK to

leave the EU and says it should create an entirely new institution.

Even countries like Switzerland and Norway have to implement everything.

Norway even pays for the Budget. For the United Kingdom, a country

of that size and significance, it would require a new institution and

at the core of it, the workings of an internal market. A halfway house

or go the whole hog. If the UK ever does decide to leave the EU, there

will be even more questions about what to do next.

Susana Mendonca reporting. We have been joined from Brussels by the

UKIP MEP Marta Andreasen. What kind of relationship in your mind would

a UK outside the EU have? Well, I think that the UK should leaves. I

don't think it should follow the example of the Norwegian example or

The UK will be in this unique position that has belonged to the

EU for a long time, and now has to really restructure its trading,

restructure its regulations, and all this talk about the car

industry moving away, I think it is nonsense. I think that the UK has

now to develop other markets, other relationships with a different

markets. The EU economy is shrinking, so I think the UK should

stop trying now to develop this new relationship because, you know, we

are selling less and less to the EU members. Hold on. I need to ask you

another question. I will get back to what I originally asked you. If

the UK is outside of the EU, with therefore none of the obligations

and costs that EU membership imposes on us, why with the

Europeans give us access to the massive free-market, the open

market, of the European Union without exacting a considerable

price for? The first day that we left the European Union, the UK

would pay 43 million less to the European Union, so this is the

first benefit it would have. If the UK decided to leave, I think this

would bring the whole of the European Union to rethink the whole

structure. The UK is in a perfect position today, a very strong

position to negotiate its demands. Cameron today should be doing this.

Because the European Union needs the UK more than the UK needs the

European Union, I can assure you, and that is why Angela Merkel went

to Downing Street last week. went because it was a scheduled

trip. Tim Burr... No, she went because she wanted... I beg your

pardon. I am asking my guest. He's leaving the EU on the agenda?

Ultimately possibly commit yes. -- We are putting a series of

practical proposals through it and this is what we want this

government to be negotiating with Europe to get a better deal for

Britain to stay within the EU. That is the ideal position, but I

believe that can only happen if it is backed up with a very real

threat that if we don't get anything like that better deal than

we need to have an in or out referendum and put it to the people.

You recommend out? I don't know. If we were to have a referendum today,

the amount we pay, the restrictions we get back, I think I would vote

"out", but if you asked the British public if they would stay in if we

had a much better deal with more powers decided here, as people

thought they were voting for in 1975, most people would want to

stay in. I don't think we will get that better relationship unless

there is a real threat of a referendum. Does Labour have a

position on repatriation of powers? It remains to be seen whether this

government will argue for repatriation of powers. The Liberal

Democrats do not want that. We know the Conservatives do. Whether they

can is another matter. I did not ask you about the Conservative

Party but the Labour policy. believe we should strongly

prioritise reform of the European Union to make sure that the budget

is spent better, to make sure there is a proper single market...

not repatriation? We will wait and see what the Conservatives will

come up with. But you do not have to wait to answer the question. In

principle, would Labour like to see some powers repatriated to London?

A think the priority should be arguing for reform. Is that yes or

no? I do not think it is realistic... One year ago in this

studio, Ed Miliband said I don't think Brussels has too much power.

What is the position now? I think Brussels does have too much power

won. I will give you the final word, martyr Andreassen? Before talking

about repatriation of powers, David Cameron should say he is leaving

the European Union. I repeat what I said to you. I think the EU is very

worried about the UK leaving and we are in a very good position to

negotiate. First we have to say that we are leaving. Right. I think

I've got that bit. Sank used for joining us from Brussels. -- a

thank you. Now, you may be surprised to hear

this but MPs have been kicked out of Parliament today. No, it is not

because it's a Friday and they have all been sent back to their

constituencies. Nor is it due to repair works. Any other ideas? It

is because young people have taken over the green benches. Yes, today

is Youth Parliament day, where 307 youngsters get to debate what they

want in the Palace of Westminster. One of the issues they have been

discussing is a curriculum for life. They will be lucky! Let's hear a

bit of what they have been saying. Why go to school for several years

to then not be able to get a job? Y N-Dubz �60,000 in debt? All of us

in the UK Youth parliament have a power to make change happen -- why

should we end up �60,000 in debt? Youth unemployment is at its

highest for a generation but so is the help available. I am 17 and it

is important for me to think about getting ready to work, but what

about the 11 and 12-year-olds that we represent? Is it a concern they

share? How relevant is it for them to be the Youth Parliament

campaign? If the fact that so many young people are unemployed is a

reflection of the economic climate. All too often we are blamed for not

getting jobs. But I can assure you that not enough is being done. We

all go to college and get qualifications but that is not

enough. We need work experience, help with writing CVs,

professionals coming into schools and colleges and giving as

practical advice as well as And they say young people are not

as well behaved as the older generation. Just look how well-

behaved they were compared the Prime Minister's Questions, and how

articulate, too. And they didn't read anything either. Let's go to a

16-year-old from Hertfordshire. What were you talking about today?

I was speaking against making transport cheaper, better and

accessible for all. I was allocated it, so I had no choice in it. It

was challenging! That will be useful if you get into parliament

and you'd have to do what you are told by the whips! What are you

hoping to achieve today? Personally, it is a review of a curriculum to

prepare us for life. From speaking to people in my area and from my

school, I can see how important it is that we need that review.

Michael Gove has been brought in recently, so we need his help and

the government help to make sure that the students are getting

educated the Right Stuff and in the right way. Have you spoken in the

chamber, were you speaking on the green benches? What was it like,

did you feel you are on TV? The it was a weird feeling but it was

really good. Very nerve-racking and a bit scary, but hopefully people

got my point and I came across in the right weight. Do you think you

might have an appetite for this, will we see you as an MP and one

day? Hopefully, you never know. I want to go into politics in some

way. I hope to do law and politics at Uni. Will believe that is a

future career. It's the Daily Politics is still going, come and

see us. Before we say goodbye to you two, we need to get the answer

to our quiz. Earlier we told you about some of the foreign fact-

finding trips MPs have been taking, but we wanted to know - which of

these destinations hasn't been What is the answer? If any MP has

put in Sandy Island in their expenses, they are in trouble - it

doesn't exist! It is the correct answer. It would be very

It's just gone 12.30pm. Coming up in a moment it's our monthly look

at what's been going on in European politics. For now it's time to say

goodbye to my two guests of the day, Pippa Crerar and Iain Martin. This

week, members of the European Parliament have been meeting in

Strasbourg for their regular plenary session. So what have they

been getting up to? And what else has been happening over in

Brussels? Here's our guide to latest from Europe, in just 60

Despite 12 hours of talks, eurozone finance ministers failed on Tuesday

to reach a deal to release the bail-out funds to stop Greece going

bankrupt. Finance ministers and the IMF will try again on Monday. In

Strasbourg, MEPs approved 670 million euros of emergency help for

Italy, a region hit by a devastating earthquake in May.

That's the biggest EU aid package ever paid out to remember. MEPs

discussed making it cheaper and easier for all of us to splash out

on our credit cards across Europe, by standardising personal credit

and debit card payments. On Wednesday, the European Parliament

backed new laws to make motorbikes, three-wheelers and quad bikes safer

and cleaner. MEPs finally approved the nomination of Tonio Borg, a

Maltese Catholic conservative, as the you's new health commissioner.

He replaces his fellow countryman who designed after an anti- fraud

inquiry linked him to an attempt to And with us now, I've been joined

by two members of the European Parliament. The Liberal Democrat

George Lyon, and Emma McClarkin for the Conservatives. Let's take a

look at one of those stories in more detail, the appointment of

Tonio Borg as the new Maltese Commissioner. One had to go because

of problems of corruption. He's not been replaced by someone who tried

to put an anti- abortion statute into the Maltese constitution. And

he's the health commissioner. Maltese. Like most Maltese, he is

Roman Catholic. I think it is a dangerous debate we've had this

week, an argument about whether we should stop somebody taking up the

role of commissioner because they are a devout Catholic and they

uphold the morals of their church. But we supported his nomination

going through. On balance, we thought he was capable of giving

the job as a commissioner, rather than judging him on his religious

beliefs. So he can do the job of Health Commissioner despite his

view that there should be a constitutional change in Malta or

making abortion illegal. It is illegal in Ireland as well. We need

to look at, are we having dual standards just because the left

Jews to pick an argument this week? What do you think? There are

serious concerns about... As a defender to be his right to hold

the views he holds, but he has strong views on abortion, gay

rights and divorce. He is being appointed where he will make

decisions on these issues. The issue for us and the Liberal group

was, we didn't doubt his combatants but we questioned whether that was

the right portfolio. We would ask for his which portfolio, or else

strip away some of these issues so the gay rights issue and abortion

was given to another commissioner. Does the parliament have a veto

over an appointment like this? have the right to strike down all

the commissioners. It is one out, everyone out? Yes, that's the power

we have. It is a nuclear bomb you can use. It is a bit like the

Budget. We have an influence, but you could have threatened. If there

was a big clean-up well within the parliament, we could strike out all

the commissioners and left there was changed. We've taken out

commissioners before. So European leaders have spent hours trying to

hammer out a deal on the future budget for the European Union. But

whatever they agree, MEPs in the European Parliament will still get

a say on the final numbers. Jo You may think all the action is

happening in Brussels, with the leaders of the 27 member states of

the EU. But any budget deal agreed by them over there still has to

have the approval of the members of the European Parliament in

Strasbourg. The signs don't look good. The majority of MEPs want an

increase in the EU budget, not a frieze, and certainly not a cat.

There's been fierce debate in Parliament over the budget this

week, with MEPs just as divided as leaders of the member states over

how EU funds should be spent in the future. The dead hand of

bureaucracy is destroying innovation and destroying jobs in

Europe. National democracy and free markets would be a much better

model. This union, if it wants to become a real federal union, needs

resources. Needs its own income. That is the big battle to do now.

We shall do it together and if necessary, without you, Mr barrage.

The man leading the that associations in the parliaments is

more money is needed for growth. The overall amount proposed is too

low, because it would mean that for the next seven years the EU budget

would be lower than it is this year, 2012. The Commission President's

original proposal was a budget of just over one trillion euros over

seven years, to 2020. A 5% increase on the current level. The European

Council President, who is leading the Brussels the associations, has

suggested a lower figure of around 973 billion euros. Still too high

for David Cameron, who wants a freeze at 2011 levels, around 886

billion euros for the same period. We don't have the money as we used

to 20 to 30 years ago, to go on a spending spree. Francois Hollande

on Paris was elected on that and what he is doing now is calling for,

gosh, we've got to have a programme of spending better and spending

less. The UK is not alone. The Netherlands and Sweden brought you

back David Cameron's position and also want the EU funds spent

differently. The key issue for European success in the future is

cost control and responsible public budgets. But countries like France

are not going to give up a penny of their agricultural subsidy, Italy

doesn't want to. To be frank, France should also consider its own

budgetary problems. The power of the European Parliament on

budgetary matters can't be underestimated, and not just on

long-term funding. There's also an ongoing row over the amount of cash

needed for this year's and next year's budget. MEPs could decide to

wield the veto to get what they want. I don't like the word of veto

and the threat. But realise that for instance, on next year's budget,

Parliament has voted against. We are in the situation of a veto

coming from the parliament. Now all the governments have to take that

on board. A clear warning to EU leaders back in Brussels not to

ignore the will of the European Parliament. We were listening to

that. The European Parliament wants a much bigger increase even than

the commission, is that right? they voted through about 5% rise -

slightly above the figure the commission came out with. They've

been banging on about that for the last year or so. I just think they

are out of touch with reality on that one. If you start, they are

sitting there and negotiating the long-term budget negotiating

committee, it is clear from going round the table that while there

are strong noises about we might veto the Budget if it's not be Dean

of, the real game that is being played is to make sure there is

proper flexibility in how you manage the Budget. We don't even

have the basic powers that the Scottish parliament has, which is

to rollover if anyone under Spence at the end of the year or switch

budgets. To ensure the priority of jobs and growth are at the heart of

the small reform budget. And to ensure there's a mid-term review.

This Budget is for seven years. We need a mid-term review that says,

well, if things are starting to improve by 2017, maybe have another

look at it. It seems these are the areas the parliament might use the

veto. Do you agree it's unlikely that the European Parliament is

going to get what it voted for? The commission is an even going to get

as much as the 970 billion that Jo mentioned their. But it won't use

the veto even if it doesn't get it. The parliament could use a veto.

That is why it is so important negotiations are going on today and

that David is there, fighting for what is best for the UK from our

position. It might be blocked ultimately by the parliament with

their veto. Regardless of how many people are threatening to use the

veto there, Parliament do still have that, but we need to get the

right budget for the whole of the European Union. Why do so many MEPs

want to see an increase in the budget when they know that across

Europe, even in France now, national governments are having to

take an axe to their own budgets? can't explain... A lot do it.

have 17 member states who are beneficiaries. Poland is leading

the charge for a bigger budget. Why? Because they have an interest.

Clearly, when you've got France, Germany, Austria, benevolence and

the UK all calling for a cut, it is quite surprising we don't see that

reflected in the debate. I find myself and my Conservative

colleagues calling on that. Labour MEPs vote for a rise?

they voted against. But there group Dade, they are overwhelmingly voted

for a whopping 5% increase. group that they are part of it. But

the Labour MEPs... There is remarkable consensus here among

MEPs. They are Eurocrats. They are part of the machine and they don't

like the word no. They like to see themselves as the answer.

remarking on there is a consensus between Conservative, Lib Dem and

Labour in the European Parliament to restraining the Budget.

Absolutely. That's what we voted for and we argued for. One of the

huge mistakes a lot of parliamentarians make his Facey

fiscal responsibility being the preserve of Euro-scepticism. It is

nonsense. We need to spend money better in Europe if we are to

convince citizens that Europe is worthwhile. Do you think they will

come to an agreement in Brussels? The word is not, not going to

happen today. But I think that's bad for the UK and bad for the

whole of Europe as well, waiting around, when are they going to do

this deal? I don't think a deal is going to be done. Most member

states will want to have another go at it and frame the debate. 2013?

Mr Cameron has to negotiate with his backbenchers as well as the

rest of Europe. This week MEPs have been debating two reports on shale

gas, seen by many as a possible low cost, low-carbon solution to

Europe's energy needs, although others have raised environmental

concerns. So what is it? Shale gas is produced by a process called

hydraulic fracturing, or fracking. This pumps water at high pressure

into rock to create narrow fractures, which allow shale gas to

flow out and be captured. In 2010, a Government study estimated there

could be 5.3 trillion cubic feet of recoverable gas in the UK. But a

study earlier this year suggested there could be much more offshore.

Maybe up to 100 trillion cubic feet in the North Sea. This week, MEPs

accepted a report by the Energy Committee which said each member

state the right to decide for itself whether to extract shale gas.

But MEPs also voted in favour of a report from the Environment

Committee which outlined the need for tougher regulation on shale gas

activities, although an amendment proposing a moratorium on all shale

Speaking during the debate on Tuesday, the co-author of the

Energy Committee report Niki Tzavela said shale gas was

potentially a game-changer. Based on American experience because we

don't have a European experience of this, shale gas is potentially the

biggest energy development since the 1920s, as big a change as when

we switched from using coal to oil. And we have been joined from the

Hague in the Netherlands by the Dutch Green MEP Bas Eickhout. This

must be a nightmare for a green light Q. Her new fossil fuel which

is clean and cheap and based in If it was a fossil fuel like that,

I would not have a problem. But is it clean and visit easily

recoverable? If it would have been a keen fossil fuel, I would not

have any problems. -- clean. But people are talking about the first

real change in the energy system since the 1920s. Those people on

missing the energy revolution that is going on in Germany and Denmark

now, and that is the switch to renewable energy, so why should we

go down this uncertain route through shale gas? Well we know

other countries are already making the move to renewables. I go for

renewables, it very clearly. Maybe they are having second thoughts

because Denmark, which is more wind Power Mac event anywhere in the

world, also has the highest cost of electricity -- more wind power. But

the United States, which has had a shell gas revolution, has managed

to cut its emissions by 5% -- shale gas. Natural gas prices in America

of one third of Europe and companies on relocating to America

because of it. The gas price in Europe is high mainly through taxes

and that has been the case also before the shale gas, and the

prices are high in Denmark was already before they went to wind

energy. That is mainly due to the tax structure of the way we deal

with energy resources. I am talking about wholesale energy prices

before tax. But we are not talking about one third then. But you are

right that there is this discussion in the US and we are looking at an

increase in gas used in the US but at the same time, if you look at

the problems they are having with shale, they are having problems

with water quality because the water that was used for the

fracking has been contaminated by chemicals, and that is now being

investigated in the US by their environmental protection agency.

They dive into this resource and then run into problems and are now

investigating that. That is what we want to prevent in the EU. First

research, please. What are the consequences for greenhouse gases

and the water quality? Methane is a very strong greenhouse gas. That

has been researched here and therefore, we say, please do the

research before because otherwise you are doing things wrong which

you will have to correct afterwards and we would like to prevent

mistakes that are happening now in the US. That is a reasonable

position, do your homework first. But your colleague says it does not

matter how much shale gas lies beneath the soil of Europe. If we

care about climate change, we This is an opportunity that we need

to look at very closely. We need to get the right balance between the

possible exploitation of this natural resource. If you look at

what has happened in the US, we cannot dismiss it out of hand. We

need an approach to take care of the concerns about the environment

but not making the of regulatory framework so difficult that you

cannot exploit it at all. We need to go forward and examine this. The

idea that we were constantly rely on Russian gas for the foreseeable

future fills me with alarm. We need to look at this and to evaluate the

impact on climate change. Clearly we have got a whole lot of coal-

fired stations which are about to shut down because of EU regulations.

We need some baseline energy production there so that we can

expand the renewable sector. We need baseline energy to balance

renewables. It is interesting to see the change in tone and

priorities of the Conservative side of the coalition government. They

came into power boasting they would be the greenest government ever and

now, the Conservatives's priority is to get the shale. We have to

look at the opportunity we have to have our own supply in the UK and

our energy security. No energy is 100% clean and safe. We have to

make sure we are looking at minimising the risk. We need to

make sure the right safeguards are in place to protect the environment

and public health, in defence or -- if that cannot be minimised, then

all bets are off when it comes to shale. I know you are a big

supporter of renewables but even as Europe heads towards more

renewables if that is the case, the harsh reality is that continental

Europe is increasingly dependent on Russian gas and Saudi oil. Does

that make you comfortable? Either way, this is exactly why we

have to get off these kinds of a -- addiction. Our energy system

transition, we now have a choice. Do we stick to the centralised

fossil fuels or do we go to a decentralised renewable system?

That is the decision we have to make. Shale gas is only healthy in

the transition time. As I hear from my colleagues, they are in favour

of doing research first and looking more into the issues and regulation.

I am very much in favour of that. But meanwhile we have to invest and

clearly I would like to invest in the energy resource which is the

cleanest, and that is renewables. I am sorry, but it is. We are

grateful for you coming onto the So as we know, EU leaders are in

Brussels today for the budget summit. Strictly speaking it is

actually a meeting of the European Council headed up by the Council

president Herman Van Rompuy. So how does this key part of the Here's

Adam with the lowdown. -- how does this key part of the EU actually

operate? You have arrived in Brussels for a

What we call summits are actually meetings of the European Council.

They happen four times a year and the only part of the EU where the

individual countries are represented. The council also meets

at ministerial level, so sometimes its finance, agricultural and

energy ministers are on the red carpet instead. This is where the

meetings happen. They are checked by the President, Herman van Rompuy,

and then leaders like Angela Merkel and David Cameron sit around this

table, and the negotiations start. But a lot of the work has been done

in advance by diplomats. What was that? Advises what always allowed

in the room but famously in negotiations over the Maastricht

treaty, John Major's right hand man hid under the table and passed him

notes here. It says here lot of decisions have to be unanimous but

some are taken by qualified majority voting, which is which

each country gets a set number of votes based on the population size

and it is more complicated than getting 50% of them, but that

system will change in 2014. In future the meetings will happen in

this new building, where the President will also have a swanky

office. When the leaders are finished talking, they put aside

their differences for the family photo. Brussels insiders measure

the length of a council meeting by the number of shirts that were

needed. When the famously gruelling meetings are over, all that is left

is to defend your decisions to the voters at home.

He snores like that in the office as well. When that they used to be

seven or even 15 turn up to the summit, they were manageable, but

when there are 27 heads of government, you do wonder! It's is

the fact they go on so late into the night. Are they making the best

decisions about the future of Europe at 4 o'clock in the morning?

They continue to want to meet late at night in the hope it will

pressure them into a compromise and I hope this time round it will

really work. It is hard for people to grasp what is really going on.

99% of the work is done long before you get to the summit. That is the

committee of the council? Yes. BT's the council at civil servant level

-- it is. What is left when you get to the heads of state is a couple

of the big, chunky, really difficult issues. Experience leads

you keep them in the room because at some stage, they have to keep

them in that room. They used to stop the clock before midnight! I

remember! Should the President of the council be directly elected by

the people? Maybe they would feel closely to Herman van Rompuy if he

was. If it was a direct election, it probably would not be him!

think you are right! A lot of people do not know what happens

inside the council meetings. We have got the chance to use the

ultimate veto to say no to something and we have a prime

minister that is prepared to do that. Should he be directly elected

or not, that is all I wanted to know? We should consider that. It