George Osborne accused over claim Britain has 'halved' £1.7bn EU bill

 
Claiming victory: Chancellor George Osborne in Brussels
Robin de Peyer8 November 2014
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Britain will only pay half of the £1.7bn demanded by the EU, George Osborne said today.

The UK will pay £850m in two instalments after next year's election after a deal was struck to offset the payment against Britain's annual rebate from Brussels.

Hailing the outcome as a "result for Britain", Mr Osborne said the UK would also get its full annual rebate on contributions to the EU budget, which are usually worth around £3bn and paid upfront.

The Chancellor arrived at the £850m figure by bringing forward a rebate Britain is due to get anyway. The sum demanded is lower because the UK will not receive the full annual rebate usually paid by the EU, according to EU Budget Commissioner Kristalina Georgieva.

Austrian Finance Minister Hans Joerg Schelling said Britain's bill remained the same as it was before, adding: "The amount can't be questioned".

Mr Osborne earlier echoed the Prime Minister's claims that the bill was "unacceptable" before claiming a victory in his negotiations with EU leaders.

He tweeted: "Now we've halved the bill, delayed the bill & pay no interest on the bill. Result for Britain.

"We'll get full British rebate - paid upfront. We will pay c£850m total, in instalments in 2nd half of next year."

Speaking to reporters in Brussels, the Chancellor added: "We have worked intensively and constructively with the Vice-President of the Commission and the other member states. And today I can say this - instead of footing the bill, we have halved the bill, we have delayed the bill, we will pay no interest on the bill. And if there are mistakes in the bill we will get our money back."

Shadow Chancellor Ed Balls accused Mr Osborne of using "smoke and mirrors" in claiming he had halved the bill.

He said: "Ministers have failed to get a better deal for the British taxpayer. Not a single penny has been saved for the taxpayer compared to two weeks ago when David Cameron was blustering in Brussels.

“By counting the rebate Britain was due anyway they are desperately trying to claim that the backdated bill for £1.7 billion has somehow been halved. But nobody will fall for this smoke and mirrors. The rebate was never in doubt and in fact was confirmed by the EU Budget Commissioner last month."

European Commission vice-president for budget Kristalina Georgieva confirmed countries would be able to make stage payments in "exceptional circumstances" under the reform package agreed.

The demand had arisen from a recalculation of Britain's gross national income after strong economic performance.

David Cameron hailed the settlement after earlier insisting that the UK would not pay by the initial deadline of December 1, and would not hand over "anything like" the sum demanded.

Maverick Euro-sceptic Tory MEP Daniel Hannan added to doubts over Osborne's claims on the settlement.

He tweeted: "The EU sticks us with a bill. Ministers double it, apply the rebate, return to the original figure and claim victory. We're meant to cheer?"

Mr Hannan added later: "If, as other EU ministers are saying, the amount is unchanged - the rebate was always going to apply - then we're being taken for fools."

And Ukip leader Nigel Farage said he still believed the UK would pay the full sum of £1.7bn.

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