David Cameron vowed to reject a cut in Britain’s rebate from Brussels as he prepared to enter talks over the size of the European Union budget.
The Prime Minister said he would be “fighting incredibly hard” for the UK when he joined fellow EU leaders in Brussels yesterday for tortuous negotiations over EU spending between 2014 and 2020.
He is calling for a real-terms freeze in the budget but faces fierce resistance from many other member states who, because they are net beneficiaries from the EU, would prefer to accept the significant increase proposed by the European Commission (EC).
The prospect of a rebate cut has been raised by both the EC and in revised budget proposals put forward by European Council president Herman van Rompuy.
But Mr Cameron ruled out any further reduction in the rebate beyond what Tony Blair agreed to in 2005.
“The rebate negotiated by Margaret Thatcher is an incredibly important part of Britain’s position in Europe and making sure we get a fair deal,” he said at Prime Minister’s Questions. “It is absolutely extraordinary that the last government gave away almost half of that rebate and we’ve never heard one word of apology, one word of regret, for the fact that however hard we fight in Europe – and I will be fighting incredibly hard this week for a good deal – they cut away our feet by giving away half the rebate.”
The rebate effectively compensates the UK for the fact it receives relatively little support under the Common Agricultural Policy (CAP), compared with similarly sized economies like France.
It is currently worth about 3.6bn euros (£2.9bn), and meant that Britain’s net contribution in 2010 was 7.3bn euros (£5.9bn) rather than 10.9bn (£8.8bn).
However, it has also emerged that even if Mr Cameron gets the EU to agree a cut in the budget then Britain’s payments to Brussels could still end up rising due to the complicated way that contributions are calculated.
The Prime Minister’s spokesman said the summit would address the ceiling for EU spending rather than the UK’s contribution. But he insisted the rebate was “fully justified” and would be protected.
The spokesman added that Mr van Rompuy’s proposals for the size of the budget were an improvement but still contained further room for cuts.
Mr van Rompuy has tabled proposals to put a ceiling of 973bn euros (£783bn) – at 2011 values – on the amount the EU can commit to spending over the seven years between 2014 and 2020.
This would represent a real-terms reduction compared to the 993bn euro (£799bn) limit for 2007-13 and is well below the Commission’s request for 1,033bn euros (£831bn).
However, the council president has not put a figure on the maximum amount which could actually be spent, which tends to come in lower than the commitment ceiling, and was 943bn euros (£759bn) over the period 2007-13.