AMID all of the fuss about the size of the EU budget and whether Britain can hold on to its €5 billion (£3.4 billion) rebate, no one in Tony Blair’s camp has asked the important question: why is the EU giving us money? The important question is not always the obvious or easy question and no one in Whitehall is likely to be in the mood for a rethink.

However, if the Government is serious about EU budgetary reform, it needs to address fundamental issues. The real question facing British taxpayers is not how much Britain pays for Europe but how much it receives out of the EU kitty. The real question is why Britain gets any money at all.

You may be unaware but we do get money from Brussels, lots of money, and I am not referring to Common Agricultural Policy payments to farmers, but money for roads, public transport, urban redevelopment, business development, training, arts, culture and positive action for women.

The best example of these receipts is the Merseyside Objective One programme, which has been in operation for six years and probably represents the biggest wad of public expenditure ever pumped into the Liverpool area (a region that has got more than its fair share of subsidy from central government). At midnight on December 31 next year, Merseyside will have received (or been promised) €1.3 billion in grants and subsidies from various bits of what the European Commission calls structural funds, including regional aid and the social fund.

Structural funds are the biggest pot after the Common Agricultural Policy and Objective One is the king of all honey pots, a sugary heaven to which many apply but few are chosen. Few areas of the core 15 EU states still qualify for Objective One because they are simply not poor enough. The main criterion for entitlement is that GDP per capita is below 75 per cent of the EU average and, after decades of economic moribundity, Merseyside qualifies; there are still areas of Liverpool where one in three is unemployed.

So, all the better that Brussels is chucking some cash their way, you might think. Perhaps, but if we are thinking again about the EU budget, the more important question is why it is necessary for Brussels to dole out this cash. More to the point, is it right that Swedish or Dutch taxpayers should fund the regeneration of Liverpool? Why should Sven in Malmo bail out Steve in Speke? This is not an argument against helping Liverpool (although some might argue that its main problem is a lack of a culture of self-reliance) but a query about where the responsibility lies.

Liverpool may be poor but Britain is now comparatively wealthy. Liverpool’s main problem is the pathetically low rate of business creation compared with other areas of the country. The Mersey Partnership, a lobby group, reckons that it is improving but if it is true that Merseyside’s dependency and deprivation can be reversed by an injection of public money, surely it is incumbent on the UK Government to make the resources available or explain why it will not do so. It makes no sense for Britain to send billions of euros to Brussels and wait for a cheque to arrive on the return flight. Why wait for eurocrats to approve a British hard-case that is a worthy recipient of EU charity when we could do it ourselves with less fuss and bureaucracy? Among the new EU member states there is a catch-up argument. It may be beneficial for the Union that Poland or Hungary’s water and sewerage infrastructure is improved rapidly — waiting for the Poles and Hungarians to generate the funds internally could take decades. It would require penal taxation rates that would slow the growth rate of the accession states, prolonging their dependent status. Among the core 15 EU states, there is no rhyme nor reason in collecting large pots of money for redistribution among each other.

There may be a few areas where co-operation is useful — interstate transport, for instance — but if Sefton needs a new tramway, it makes no sense to collect the funds in Stuttgart. It makes sense only if you think that Brussels should be not just a co-ordinator of projects for common advantage but a redistributor of wealth. If we believe Brussels should be Washington, then Sven must pay for Steve’s job-seeker’s course and Priscilla will pay for Pietro’s business development grant.

But we don’t really believe in redistribution because we will not give Brussels independent power to impose taxes on us. Instead, we grant them the right to tell us how to spend the money we raise. Brussels has become a sort of wastrel with a trust fund, given the power to spend without the burden of finding the money. We should stop the cheques.

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