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David Cameron told fighting £1.7bn demand could hurt UK’s EU rebate David Cameron told fighting £1.7bn demand could hurt UK’s EU rebate
(about 3 hours later)
The row between Brussels and Downing Street over the EU budget has intensified after the European commission warned that any changes to the methodology of calculating payments would raise questions about Britain’s multi-billion pound EU rebate. The row between Brussels and Downing Street over the EU budget has intensified after the European commission warned that any changes to the methodology of calculating payments would raise questions about Britain’s multibillion pound EU rebate.
No 10 was forced to defend the rebate after Jacek Dominik, the European budget commissioner, warned David Cameron that he is in danger of opening Pandora’s box by refusing to pay an extra £1.7bn demanded by Brussels.No 10 was forced to defend the rebate after Jacek Dominik, the European budget commissioner, warned David Cameron that he is in danger of opening Pandora’s box by refusing to pay an extra £1.7bn demanded by Brussels.
The fresh row erupted as Downing Street confirmed the prime minister, who is to make a statement on Monday afternoon to MPs on last week’s EU summit, is refusing to meet the demand by 1 December. The sum of £1.7bn is based on an upward revision of Britain’s Gross National Income (GNI) by the Office for National Statistics (ONS). The new figures were agreed with Eurostat, the European statistical agency. The fresh row erupted as Downing Street confirmed that the prime minister, who is to make a statement on Monday afternoon to MPs on last week’s EU summit, is refusing to meet the demand by 1 December. The sum of £1.7bn is based on an upward revision of Britain’s Gross National Income (GNI) by the Office for National Statistics (ONS). The new figures were agreed with Eurostat, the European statistical agency.
A furious Cameron, who only learned about the demand as he arrived at the EU summit on Thursday, made clear in Brussels on Friday that he had no intention of paying up by the deadline. He said: “You don’t need a Cluedo set to know that someone has been clubbed with the lead piping in the library.”A furious Cameron, who only learned about the demand as he arrived at the EU summit on Thursday, made clear in Brussels on Friday that he had no intention of paying up by the deadline. He said: “You don’t need a Cluedo set to know that someone has been clubbed with the lead piping in the library.”
But the European commission made clear it would not back down as it said the GNI calculations are also used to work out Britain’s much larger EU budget, which is worth £2.9bn a year. But the European commission made clear it would not back down as it said the GNI calculations are also used to work out Britain’s much larger EU budget rebate, which is worth £2.9bn a year.
Dominik said: “By law, member states are obliged to pay their contribution. I was surprised by the reaction [from David Cameron] because up to this moment there was no single signal from the UK administration that they have [a] problem with this figure. Never in the past there was a situation that such a decision was changed because one of the member states have contested.”Dominik said: “By law, member states are obliged to pay their contribution. I was surprised by the reaction [from David Cameron] because up to this moment there was no single signal from the UK administration that they have [a] problem with this figure. Never in the past there was a situation that such a decision was changed because one of the member states have contested.”
Asked whether the demand could be withdrawn, the commissioner said: “I am afraid it will be extremely difficult to do, especially as resources decisions and the implementation regulations concern [the] UK rebate as well.Asked whether the demand could be withdrawn, the commissioner said: “I am afraid it will be extremely difficult to do, especially as resources decisions and the implementation regulations concern [the] UK rebate as well.
“So if you open this act for future negotiations you open a Pandora’s box. You cannot, on one day, question the system that imposes on you some additional contributions due to your own data that you have presented and the next day say but I also like the other element when I get £0.5bn back due to the same data because this new calculation of the British rebate is also based on the same GNI.”“So if you open this act for future negotiations you open a Pandora’s box. You cannot, on one day, question the system that imposes on you some additional contributions due to your own data that you have presented and the next day say but I also like the other element when I get £0.5bn back due to the same data because this new calculation of the British rebate is also based on the same GNI.”
The prime minister’s spokesman said that Britain would refuse to allow the rebate to be placed on the table in any negotiations. Downing Street confirmed that the chancellor, George Osborne – who will discuss the demand for the extra £1.7bn at a meeting of EU finance ministers next week – is to raise it when he meets his German counterpart, Wolfgang Schäuble, in Berlin at an OECD summit on tax evasion this week. The prime minister’s spokesman said that Britain would refuse to allow the rebate to be placed on the table in any negotiations. Downing Street confirmed that the chancellor, George Osborne – who will discuss the demand for the extra £1.7bn at a meeting of EU finance ministers next week, is to raise it when he meets his German counterpart, Wolfgang Schäuble, in Berlin at an OECD summit on tax evasion this week.
The prime minister suffered a setback in his attempts to blame the European commission for having clubbed him “with the lead piping in the library” when the ONS said it had been consulting “in a very public way” on the changes to the UK’s GNI figure for more than six months.
Joe Grice, the chief economist at the ONS, told The World at One on BBC Radio 4: “We in a very public way, with a lot of consultation and a lot of explanation, over the last six months, longer, have actually been putting out the changes, the methodological changes, the new data and the implications for the UK figures. So in that sense we have known about our figures for quite a considerable time. The final figures we transmitted to Eusostat, the statistical office of the EU, at the end of September.”
Downing Street confirmed that the government would be examining the work of the ONS as well as Eurostat and the Europeab Commission as it challenges the demand for the extra £1.7bn. But Britain will focus its main attention on comparing the assessment of Britain’s GNI with other member states.
The prime minister’s spokesman said: “We need to look at all of this including, of course – because this is a relative calculation with other member states, this is a redistribution between member states that depends on the estimates of the GNI bases in those countries as well – we need to look at all of these elements to ensure that we properly understand the positions. We need to look at the entirety of it across the EU.”