EU Budget Surcharge

Lord Richard Excerpts

Monday 10th November 2014 Lords Chamber

[Lord Deighton]

I thank my noble friend for the questions; there is quite a list there. My right honourable friend the Chancellor has demonstrated how effective his constructive engagement has been in producing this outcome. I would expect the same result from the Prime Minister’s constructive engagement on the reform programme that we will put to the British people in 2017. It is absolutely right that we drive a hard bargain and get better value for money. If one looks at the EU budget, my right honourable friend the Prime Minister has been the first to achieve a real-terms cut for the multi-year financial facility, through to 2020, which has thereby capped the amount spent. The weakest part of our performance of the past few years in that negotiation was, frankly, the poor rebate deal that the previous Government gave away, which put us in a much weaker position. That was by far the most ineffectual piece of negotiation. It is a complicated calculation to work out these rebates, but the rebate side of the calculation does not go back for the same full period as the GNI calculation.

[Lord Richard (Lab)]

My Lords, the original demand from the Commission was for €1.7 billion. Its demand is still €1.7 billion, against which a British rebate of approximately half that sum has to be offset. If that is right, and I think it is, it does not seem to me that the Government have reduced the amount of the demand by one penny—certainly not by one euro. What they have done, through some creative mathematics, is bring in a rebate that we were going to get anyway and then pretend that they have reduced the €1.7 billion, which they have not.

[Lord Deighton]

My Lords, I am afraid that I can only repeat the position. It was far from clear that the rebate would be applied. That is the point at issue between us. We can continue to have that discussion, but it was far from clear that the rebate would be applied. That is what was accomplished in the last two weeks. The other things that have been accomplished are a deferment of the payment and that there will be no interest on those payments. We have also changed the rules so that we cannot get ambushed like this again.