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EU commissioner calls for calm over £1.7bn tax bill EU commissioner calls for calm over £1.7bn tax bill
(35 minutes later)
Lord Hill, Britain’s new EU commissioner, has called for calm in the row over the sudden demand for a £1.7bn increase in Britain’s EU budget contribution, arguing that a way through the controversy could be found.Lord Hill, Britain’s new EU commissioner, has called for calm in the row over the sudden demand for a £1.7bn increase in Britain’s EU budget contribution, arguing that a way through the controversy could be found.
He was speaking to the BBC before a meeting of EU finance ministers on Friday to find a solution.He was speaking to the BBC before a meeting of EU finance ministers on Friday to find a solution.
Britain has insisted it will not accede to the demand on the timetable set out by the EU, raising the prospect of the union imposing fines on the UK in the form of interest for non-payment from 1 December.Britain has insisted it will not accede to the demand on the timetable set out by the EU, raising the prospect of the union imposing fines on the UK in the form of interest for non-payment from 1 December.
The Treasury minister, David Gauke, has said Britain could probably gather a blocking minority to vote against the rise if necessary. But British officials remain confident that Italy, holder of the EU presidency, is eager to find a compromise, possibly through payments in instalments. The Treasury minister David Gauke has said Britain could probably gather a blocking minority to vote against the rise if necessary. But British officials remain confident that Italy, holder of the EU presidency, is eager to find a compromise, possibly through payments in instalments.
Hill said: “It seems to me that this is one of those classic examples you get from time to time and where something that a group of people think are technical matters suddenly, and in this case for perfectly understandable reasons, become highly political.Hill said: “It seems to me that this is one of those classic examples you get from time to time and where something that a group of people think are technical matters suddenly, and in this case for perfectly understandable reasons, become highly political.
“The sensible thing now is to try to calm the situation down, and to look at the facts, and to look at a practical solution to the challenges that various member states face.”“The sensible thing now is to try to calm the situation down, and to look at the facts, and to look at a practical solution to the challenges that various member states face.”
David Cameron is under pressure from his backbenchers to refuse to pay anything additional at all to the EU, and is under particular pressure on the issue in the runup to the Rochester and Stroud by election this month. The prime minister has said he will not pay anything like the full amount or on the schedule set by the EU commission. David Cameron is under pressure from his backbenchers to refuse to pay anything additional at all to the EU, and is under particular pressure on the issue in the runup to the Rochester and Stroud byelection this month. The prime minister has said he will not pay anything like the full amount or on the schedule set by the EU commission.
Hill declined to say if he supported the increased contribution, arguing instead that a statistical change had occurred without the full implications being thought through.Hill declined to say if he supported the increased contribution, arguing instead that a statistical change had occurred without the full implications being thought through.
Britain is not the only country to be hit by the demand for the extra contribution to the EU budget, but faces by far the largest demand, partly because the UK economy has grown quicker than forecast and faster than it had been predicted eurozone countries would grow. Germany and France are being offered budget reductions due to their lower-than-expected growth figures.Britain is not the only country to be hit by the demand for the extra contribution to the EU budget, but faces by far the largest demand, partly because the UK economy has grown quicker than forecast and faster than it had been predicted eurozone countries would grow. Germany and France are being offered budget reductions due to their lower-than-expected growth figures.
But the new European commission president, Jean-Claude Juncker, whose appointment Britain tried to block, told the European parliament on Tuesday that he did not like Cameron’s vivid display of anger over the budget bill at the end of the summit.But the new European commission president, Jean-Claude Juncker, whose appointment Britain tried to block, told the European parliament on Tuesday that he did not like Cameron’s vivid display of anger over the budget bill at the end of the summit.
Juncker said the prime minister’s tactics had put the UK at a disadvantage. “I don’t have a problem with David Cameron,” he said. “He has a problem with the other prime ministers.”Juncker said the prime minister’s tactics had put the UK at a disadvantage. “I don’t have a problem with David Cameron,” he said. “He has a problem with the other prime ministers.”
Officials believe a compromise is possible by granting Britain permission to pay instalments monthly, quarterly or at some other rate over the coming months. The UK would avoid the interest charges that would accrue daily from 1 December, at an initial annual rate of 2.5%, if it failed to pay in full.Officials believe a compromise is possible by granting Britain permission to pay instalments monthly, quarterly or at some other rate over the coming months. The UK would avoid the interest charges that would accrue daily from 1 December, at an initial annual rate of 2.5%, if it failed to pay in full.
“The solution is likely to be instalments, but Britain will still have to pay because it signed up to the statistical review back in 2000,” said one EU official, speaking on condition of anonymity.“The solution is likely to be instalments, but Britain will still have to pay because it signed up to the statistical review back in 2000,” said one EU official, speaking on condition of anonymity.
Hill said he would act in the interests of all 25 EU member states, not just Britain, but added that he believed the UK needed a referendum on its membership because it was a boil that needed to be lanced. He added that he believed Cameron wanted Britain to remain a member of a reformed EU.Hill said he would act in the interests of all 25 EU member states, not just Britain, but added that he believed the UK needed a referendum on its membership because it was a boil that needed to be lanced. He added that he believed Cameron wanted Britain to remain a member of a reformed EU.
At prime minister’s questions on Wednesday, Ed Miliband, the Labour party leader, pressed Cameron to repeat a pledge that he would never recommend Britain vote to leave the EU, but the prime minister declined to do so.At prime minister’s questions on Wednesday, Ed Miliband, the Labour party leader, pressed Cameron to repeat a pledge that he would never recommend Britain vote to leave the EU, but the prime minister declined to do so.
The Conservatives argue that Cameron is planning on the basis of success in the negotiation.The Conservatives argue that Cameron is planning on the basis of success in the negotiation.