Bruce Anderson: Mr Blair should have refused to agree an EU budget without real CAP reform

Last week, it was revealed that the criminal who murdered John Monckton had been released early from a previous sentence, even though it had been reckoned that there was a 91 per cent chance of his re-offending. There is to be an inquiry: quite right too.

On Thursday and Friday, Tony Blair had to deal with another serial criminal. There is a 100 per cent chance that he will re-offend. Indeed, the most hardened of old lags was in the dock. His pleas for another chance were a tissue of mendacity: an insult to the meanest judicial intelligence. Anyone who heeded them should be mocked and castigated. Yet Tony Blair did. Jacques Chirac was free to go, with generous compensation from British public funds.

There is an intellectual case for reducing the British rebate. It was negotiated in a very different world. Equally, those of us who have argued that the EU must cease its obsession with the pettinesses of Brussels and Strasbourg in order to address the moral challenge of stability in central and eastern Europe have to live up to our arguments. Though enlargement has embraced most of the nations of the former Soviet empire which we had to abandon at Yalta, helping them is bound to cost money.

Moreover, the EU's record as an aid agency is a good one. Ireland, Portugal, Andalucia: their economies have been transformed. The same is true of Greece, even though the costs of doing so were greatly increased by corruption. So an aid programme for eastern Europe should have a claim on our generosity - but not now. At these latest EU negotiations, there was a more important issue.

Over the years, the EU budget has not evolved in a rational manner, appropriate to worthy priorities. It has grown like a weed or a tumour. It has increased during repeated bouts of hornswoggling, boondoggling and pork-barrelling. As a result, it has long since lost contact with either desirable priorities or intellectual clarity.

For the past 10 years, the EU's own Court of Auditors has refused to approve the budget's figures. This is not only because of corruption. It is because the whole budget process has become so complex as to elude the power of the human mind.

At the core of the difficulty lies the Common Agricultural Policy. It too was originally negotiated in a very different world. Just after the war, much of Europe was threatened by starvation. The men who devised the CAP were haunted by images of malnourished children. The politicians of the 1950s were determined to ensure that Europeans would have enough to eat.

There was a further factor. In its early days, the European Common Market was an economic coalition between German industry and French agriculture. The result of this was the CAP.

Its founding rationale has long since disappeared. In Europe today, diet means avoiding excessive consumption, and calories are a threat. Hunger has been banished. But even if the reasons no longer apply, the funding does. The CAP now consumes 40 per cent of the EU budget. It pays some farmers not to produce; it pays others to overproduce. It also distorts world markets.

Even if people in Europe have enough to eat, plenty of people in the Third World are still menaced by famine. Most of them live in countries which depend on agriculture. If those countries were allowed access to world markets, their economies could grow, thus removing the threat of starvation. But the CAP stands in the way. It greatly restricts poor countries' access to the affluent European food market. It ensures that European food is dumped on world markets at subsidised prices, enabling it to compete unfairly with Third World producers. It also has made it much harder for the World Trade Organisation to press for a global free market in agriculture.

Europe is not solely to blame for this. The United States is also guilty. But as long as the world's richest countries coalesce to prevent the Third World from exploiting its agricultural advantages, there can be no solution to the problem of world poverty. Any politician like Tony Blair, who professes to believe in helping the Third World but refuses to press for free trade in agricultural produce, is a hypocrite.

So there are innumerable reasons, most of them with unanswerable moral force, to compel a radical renegotiation of the EU budget. It is far more important to achieve this than to provide a few hundred millions of aid to the countries of eastern Europe. There is only one problem with that argument. It is entirely impractical. There was never any prospect that the French would agree to a reform of the budget which would inevitably reduce the subsidies which the CAP now pays to French farmers.

Even so, the impractical must sometimes be the imperative. In the 1960s, De Gaulle paralysed the operations of the EU in order to achieve the Luxembourg compromise, which in those days prevented the larger states from being outvoted on important questions. In the early 1980s, Mrs Thatcher reduced several successive EU summits to rubble in order to bludgeon Britain's rebate out of her reluctant partners. Ian Gilmour once said that she would insist on talking to heads of government as if they were members of her cabinet. But whatever the assaults on their amour propre, she won.

The CAP would have justified Tony Blair in recommissioning the handbag while informing the rest of Europe that the UK would never agree to a budget deal without reform. But he was not prepared to do that, for the worst of reasons: weakness and vanity.

Earlier this year, when the French and Dutch voted to reject the EU Constitution, Britain's European policy collapsed. Up to that point, Tony Blair had been preparing to argue in favour of the Constitution, thus restoring his European credentials. But the French and Dutch electorates exercised their veto, leaving Mr Blair hopelessly confused.

He was too weak to think through an alternative policy; he was also too vain to risk doing so. Readers may not have noticed, but for the past six months Mr Blair has held the chairmanship of the Council of Ministers, for the last time during his premiership. So he wanted a happy ending; an outcome that could be added to his much-cherished political legacy. That is why he capitulated to Jacques Chirac at the end of last week.

If Mr Blair had any moral stamina, he would understand that democratic politics does not always permit happy endings. If he had been vigorous in pursuit of Britain's interests while insisting on the need to help the Third World, he would not have got a deal, but he would have earned respect. As it is, he achieved a weaselly little deal not worth the lying promises in which it was expressed. He did not win any respect. In Europe, he will be seen as weak. In Britain, almost everyone will agree. This is going to be an expensive legacy.