In a partial concession to member states (including Britain) seeking a curb on spending, the latest draft of the EU budget features €50 billion worth of spending cuts. The new draft was circulated on Monday evening (29th October).

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Further moves on the budget are expected to be made over the course of a summit in Brussels on 22nd November. The 2014-2020 budget will be around €1 trillion, though a number of member states are pushing for drastic cuts to the spending, which covers farm subsidies, rural development programmes, infrastructure and research grants in all EU member states.

The draft released on Monday has been slammed for its readiness to remove significant funding for development projects and 'cohesion' measures, which aim to address the economic disparities between the EU's poorer and wealthier member states.

Although there had been speculation that cuts could affect agriculture spending, industry lobbyists’ claims that 'food production must be supported' given the uncertainties of the future have clearly not fallen on deaf ears in Cyprus, the current EU president sate, where the draft was drawn up. Spending in this area is largely untouched in the draft budget, suffering only a negligible reduction.

Further progress on European Common Agricultural Policy reforms have been postponed until the EU budget is finalised, meaning reform proposals for the post-2013 CAP are unlikely to be revisited until next year and may not be implemented on time.  

However, farming groups have reacted strongly to Commission plans to reduce CAP spending. They have called on heads of the EU’s member states to resist such measures at next month’s Heads of Government meeting.  

Tomorrow (31st October), British MPs will meet in the House of Commons to discuss the budget. Having previously increased European spending when in power, senior Labour MPs including shadow Chancellor Ed Balls may side with Tory rebels on the right of the party to demand the government seeks cuts to EU spending. Sources from the party have suggested Labour leader Ed Miliband may ask his MPs to vote with Conservative rebels to defeat the government.

Miliband suggested that European spending should be reduced in the light of "swingeing cuts" being visited on the British public. However, major EU powers, including France and Germany, have expressed support for an above-inflation rise to the EU budget. Prime Minister David Cameron intends to argue for a real-terms freeze on spending.

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