Treasury holds back on EU budget threat

Treasury minister David Gauke said the UK was aware it could if it wished delay budget talks across the EU if the European Commission did not at least allow a review of the figures behind the controversial surcharge.

But he warned that such a move could back fire, with longer term cost linked to it, and so would only be considered a last resort.

Asked at a parliamentary European Scrutiny Committee about the potential to block the draft EU amending budget being worked on at present, Mr Gauke said it was an option, though not one the Treasury was keen to use.

“There is a case for blocking this, it will focus the minds of other member states, but it increases the potential liability of the UK tax payer, so the point I would make is there are arguments on different sides.”

Chair of the scrutiny committee Sir William Cash said it was “astonishing” that the Uk would face “punitive fines out of all proportion” to the issue.

Questioning the robustness of the EU statistics behind the surcharge, Sir William said “the bill is based on an enormously dodgy dossier”

He added that there was a case for the UK saying “we should not pay this sum because it is based on an out of date assumption.”

Mr Gauke said: “The idea that these numbers can be produced with little opportunity to be scrutinised and a bill paid on December 1, a bill of a very different order, well, there is a very good case for saying that.

“We will not be paying that £1.7bn sum on December 1 or a sum anything like that.”

Setting out the time line of the EU demand, Mr Gauke said: “In terms of the timeline the point at which UK officials were first informed of the payment the surcharge was at the meeting Brussels on October 17, that was the meeting of junior officials.

“Senior officials worked up advice the following Tuesday, that was shared with the Chancellor, the Prime Minister was informed on October 23.”

He added: “We are not going to be rushed into something that is not in the interest of our taxpayers.”

Mr Gauke said it was to be expected that country such as the UK which was growing faster than other EU countries would pay some extra as a result of EU budget formulas.

But he added that there was still not enough evidence of how the figures were put together

“The idea one can simply present this bill with no scrutiny is no way to run a large organisation. Our priority now is going over those numbers.”