In the wake of the deepest global economic crisis in the post war period, governments across Europe and the world are tightening their belts. In this context, Labour has set out a principled and pro-European argument that the European Union budget should not be exempt from these same challenges.

The economic climate in 2012 could not be more different to the last time the seven year European budget was negotiated. In 2005, our economy was growing and so were many of the economies of our European partners. We had just pushed through the biggest enlargement in the EU's history and had secured the reduction and reform of the Common Agricultural Policy budget.

At a time when my own constituents are seeing severe cuts to police and school budgets, I passionately believe that the government should be trying to secure a cut in the EU budget. Whitehall is imposing a massive 30% cut on the budget of Wolverhampton City Council, a far bigger cut than in Tory heartlands. Labour MPs represent constituencies in which there are high levels of deprivation and we are therefore even more acutely aware of the dire situation those on low and middle incomes find themselves in. So it should come as no surprise that there was not a single Labour MP who voted with the government's position for an inflationary increase in the EU budget.

It is regrettable that at this crucial point in negotiations, the prime minister is weak at home and abroad. He is spending more time managing both his backbenchers and cabinet ministers than negotiating with our European partners. By walking out of the December European Summit last year, the prime minister isolated the UK, squandering vital political capital. The government's stock is now at an all time low which raises questions about the prime minister's ability to secure a good deal for the UK.

The eurozone crisis has provided fertile ground for eurosceptic MPs and journalists to intensify their anti-European campaign. However, the Labour Party has consistently argued for engagement and reform in the EU. For over twenty years, the vast majority of our party has judged that it is in our national interest to remain a full member of the European Union. That remains the case today. Even against the backdrop of the eurozone crisis, the benefits of our membership are clear.

The rest of the EU has for a long time been our major trading partner. The eurosceptic argument that we should choose to focus on the BRICs rather than the EU presents a false choice. The emerging economies of Brazil, Russia, India and China have trillion pound economies and billion person populations. Only with the collective weight of the EU of some 500 million consumers, can we have any hope of negotiating trade deals and prising open markets for British businesses. The UK is immeasurably stronger as part of the largest single market in the world.

European countries have been successful in coming together to meet global challenges, such as climate change, terrorism and cross border crime. European cooperation has far outstripped international cooperation in successfully tackling these problems. For instance, the European Arrest Warrant recently expedited the extradition of the school teacher, who abducted 15 year Meagan, from France back to the UK.

After this divided, shambolic Tory-led Government was defeated on Wednesday evening, overly excitable eurosceptics have tried to paint the Labour Party as anti-European. Nothing could be further from the truth. We remain a united, pro-European party. To allow the budget in Brussels to rise in these straitened times would damage, not promote, the pro-European case.

Labour's pro-Europeanism cannot and should not be measured by the level of EU spending that we are prepared to accept. The EU budget should be subject to the same scrutiny as domestic budgets in the UK and across the Europe. It should strip out inefficiencies, further reduce spending on the Common Agricultural Policy and focus spending on creating jobs and growth. This would be a progressive European budget which recognises the depth of the economic crisis and challenges that all Europeans face.

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