Electoral credibility depends on pledging EU cuts too

Recent reports have warned that Britain faces losing its triple-A credit rating unless 'strong' action is taken after the election to cut levels of public debt.

A fortnight ago, the ratings agency Fitch said it was "uncomfortable with the fiscal adjustment path set out by UK authorities" and called for "more credible and stronger fiscal consolidation plans during 2010".

Fellow agency Moody's, meanwhile, spoke out to say that Britain had moved "substantially" closer to losing its AAA status and, at the end of March, Standard & Poors declared that the level of government debt may become "incompatible with an 'AAA' rating".

Most recently, one of the world's most powerful investment houses gave notice that Britain's AAA credit rating could be lost within a year.

The Independent reported that Scott Mather, the head of global portfolio management at the world's largest bond investor - Pacific Investment Management Co (Pimco) - said, "Miracles are needed in the next six months in order to keep economic growth in the developed world."

Looming debt trap

Alarm bells should be ringing loudly. Britain's AAA credit rating isn't merely a status symbol. Its loss would label Britain as a riskier lending prospect and, as a result, the cost of national borrowing would rise.

And when borrowing this year alone is forecast to hit £167bn, a higher interest bill could spark a spiral of higher taxes and faltering growth that could prove fatal for financial stability and prosperity.

For all the media circus of the election campaign, we are being asked to elect politicians who will have to walk a financial tightrope over that debt trap.

And so far none of them seem to be taking the problem seriously enough to be up to the job.

Major cuts to public spending - very likely public services too - will be needed. That much is being said.

But to decide which party has the credibility to govern and deserves our vote, we must be told where their axes will fall.

State the obvious

One particular point is already clear to many. We can no longer afford to splash multi-billion pound sums every year on propping up the European Union's wasteful activities.

So far, much heat and argument has been generated about the £6bn at stake over the proposed rise in National Insurance contributions.

But where is the debate about the equally substantial £6.4 billion (net) the EU cost us last year - 'taken out of the economy', if you subscribe to Gordon Brown's own rhetoric. Handed over to an organisation that hasn't had its accounts fully signed off by auditors for an unjustifiable 14 years in a row.

Surely a large and much clearer example of waste than almost any other element of government spending? But which journalist has asked Gordon Brown or David Cameron to either justify or cut this?

More relevantly, what will either party do to cut the £7.6bn that recent Budget documents show the EU will cost our new government over the year ahead?

Time must be called on where that money ends up; MEP junkets to the Canary Islands, sponsorship of dubious cultural projects, subsidised skiing holidays for the families of EU officials and much more waste.

Reality check

These are serious times and even enthusiasts in principle for the European Union must recognise that continued provision of many valued public services and even the stability of the economy are today at such grave risk that funding the grand ideals but wasteful reality of today's EU is a luxury that Britain can no longer afford.

Maybe now would in fact be a good time to discuss whether whole EU institutions which serve no coherent purpose, like the European Parliament - merely existing to provide a thin veneer of democratic respectability to the EU structure - should face the axe.

Imagine the savings! No more MEPs to pamper, grand buildings and facilities to maintain or that monthly circus back and forward to Strasbourg. No more six-figure salaries, expenses, travel allowances or multitude of other perks that - according to think tank Open Europe - cost us £1.8 million a year for each MEP.

A recent Daily Express report puts the figure as heading up to £2.1 million for each of the EU's 736 MEPs, nevermind the legions of support staff.

Really, would we miss MEPs? With our economy in dire straits, is it really such a hard decision to cut that all away, rather than slash much more valued public services?

In any case, for national ministers to get together periodically to discuss how to co-operate on the issues that affect us all, it isn't fundamentally necessary for the EU to be as politically centralised or have such a massive central budget as it wields today.

Wealth redistribution

Superstate ideology has long overtaken necessity. The EU has expanded way beyond its original purpose to the extent that its institutions and policies are now swallowing up far too much of Europe's financial resources.

Now these resources have become so critically scarce, they absolutely must be redirected - spent on the ground around Europe supporting economic recovery, rather than on glass palaces full of extra layers of lawmakers in Brussels.

Superstate enthusiasts, of course, like to downplay the EU's massive £116 billion budget by comparing it to the even bigger figure of the continent's total GDP. They conjure up an ocean to try to make a sea of money look like a drop. It's the oldest political trick in the book and, by now, surely the lamest.

So who in this election will show in the weeks ahead that they are serious about protecting public services, limiting the burden of taxes, and combatting obvious financial waste - by making clear that the £7.6bn ear-marked for the EU in the coming year will be the first piece of public spending under their axe?