I report on two months of business in this newsletter because I did not have time to write to you before Christmas.

 

The EU budget has loomed large over these months. In the Strasbourg session in December MEPs voted through the 2006 budget which will add up to 1.01% of gross national income in the EU, substantially down from its peak of 1.26% of GNI in 1996. We voted for this as a "step in the right direction" of controlling expenditure (many MEPs wanted a much bigger budget) but we voted against the proposal to channel more money to information campaigns for the Euro and the constitution.

 

Then just before Christmas the Prime Minister came to the Parliament to explain that he had given up part of the British budget rebate in respect of payments to Eastern Europe; this means that over the period 2007-2013 we will pay €10 billion (about £6.8 billion) more than we would otherwise have done. The rebate stays on the CAP and spending undertaken in the original 15 states, and adds up to a rebate of some €41 billion (about £28 billion) over the same period.

 

His quid pro quo on this is that there will be a complete review of all aspects of the EU budget including the CAP in 2008. By this means the government hopes to undo the stitch-up negotiated between Schroeder and Chirac in 2002 that spending on the CAP could remain at its current level until 2013. But there is no guarantee that, with the national veto applying and likely to be used by the French (although Chirac will be gone by then), this review will add up to much, especially since Polish farmers will be backing their French counterparts by then.

 

The deal which Blair negotiated did not find favour with MEPs, many of whom are relentless in their belief that money grows on trees. In January a majority of MEPs rejected the December agreement for 2007-2013. Conservatives abstained. Why? Because we are very much in favour of making member states more responsible for managing EU resources spent at national level (one of the things in the Parliament report) and we also support the idea of more money going to new   EU states. But we believe it is perfectly possible to meet this commitment with a smaller EU budget.

 

Some new legislation that will affect you: we gave a second reading to the draft law on recycling waste batteries. We are talking here about everything from                batteries for hearing aids to those in power tools and hospital equipment. The aim is to collect and recycle 25per cent of batteries in each country within 6 years, rising to 45 per cent after 10 years. This will avoid dumping such batteries, which contain heavy metals - lead, cadmium and mercury -, in potentially polluting landfills. If we all follow the same approach and targets then there will be no danger of someone stealing a competitive advantage by continuing to dump batteries and thus avoiding the costs of recycling. The directive lays responsibility for collecting and treating the batteries squarely on the battery producers themselves. But the situation remains confused over who exactly will manage the collection process. Certainly our local authorities are resigned to being involved and expect to have to pay for it, but in my view if the directive means what it says about producer responsibility then local authorities should not be paying. I shall work to get clarification on this as we go through the text in great detail in discussions with the Council of Ministers. It's what UK government departments describe as a "challenging" Directive. That is, for us, a nightmare, because we currently recycle about 2 per cent of our batteries.

 

We gave a rougher reception to the draft directive on port services, which we rejected in January by 532 votes to 120. We in the South West had received strong representations against this directive from our ports, especially Bristol. Ostensibly the              aim of this proposal was a good Conservative one - to bring competition to the ports of Europe, which handle nearly 90 per cent of our external trade. The directive required port owners to let companies compete to provide port services ranging from piloting ships to handling cargoes; it also attacked state aids, which allow public operators to compete unfairly with private ones. But the proposal did not suit the UK: our ports compete against each other anyway and port owners complained to us that the directive would force them to let other companies use facilities that they themselves had paid for - as in Bristol.

 

So we attacked the proposal from one angle and found ourselves in an unholy alliance with dock workers from continental ports who saw it as a threat to their jobs. There were violent scenes when they demonstrated outside the Parliament and next day I   found the area littered with the rocks and paving stones they had hurled at the police. The Commission has not formally withdrawn the proposal but it looks doomed.

 

How fares the Constitution? We debated a report this month by two MEPs - one, Andrew Duff, a British Liberal Democrat - which considered how to breathe life into the corpse. They propose the holding of Parliamentary Forums and Citizens Forums from May this year to consider suggestions for ways forward, with the aim of taking a clear decision in late 2007. The Austrian Chancellor, Wolfgang Schussel, came to Strasbourg to give his government's view as the current holder of the Presidency. He was careful: "We want to work for a good debate on the Constitution - we don't want an elite debate"  Later, at a private meeting with EPP-ED MEPs, Schussel pointed out that working with the organisational framework of the Nice Treaty means we have to reach new constitutional arrangements with each enlargement. So for him a minimalist case clearly exists for new rules on organisational points, e.g. how many commissioners and how votes are taken in the Council. Personally he would like a single EU ratification referendum on the same day - but existing rules say that the Constitution must be ratified by each Member State as it wishes.

 

We now have two committees of enquiry in place. One is into Equitable Life (Conservative representative Sir Robert Atkins MEP). The other is into allegations of the transport and illegal detention of prisoners in Europe by the CIA (Charles Tannock MEP). A very belated Happy New Year to you all.