UK 'Halves' EU Surcharge, Osborne Says

Written By Unknown on Jumat, 07 November 2014 | 22.11

Britain will pay the European Union half (£850m) of the £1.7bn surcharge it had demanded, Chancellor George Osborne has said.

Speaking after meeting European finance ministers in Brussels, he added that the deal was "far beyond what anyone expected us to achieve".

"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 any mistakes in the bill we will get our money back," he said.

However, Sky's Europe Correspondent Robert Nisbet says it appears the EU will still get the full £1.7bn as a result of what he said some would call "clever accounting".

Nisbet explained: "Next year there will be two instalments that will equal £850m that will be paid to Brussels by the UK and it will get its rebate in full. So far so good.

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"But the following year, in 2016 it appears that Britain won't be getting all of its rebate back, it will be the rebate minus £850m.

"So in effect Britain over the next few years is still going to be paying about £1.7bn but it's going to be done in a way that spreads the pain over a couple of years."

Mr Osborne said that EU rules would now be changed forever "so this never happens again".

The bill will now be paid in two instalments in the second half of 2015, after the General Election.

The Chancellor said he had got his EU counterparts to agree to changing the system for calculating adjustments to member states contributions.

David Cameron earlier warned there would be a "major problem" if Brussels insists on Britain paying the £1.7bn bill in full.

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The PM went on the offensive after a meeting with other European leaders in Finland, saying Britain would not pay "anything like" the full amount ahead of a looming 1 December deadline.

The £1.7bn demand was made by Brussels after a recalculation of Britain's gross national income in relation to other EU states.

Conservative MEP Daniel Hannan also suggested the devil of the deal was in the detail, saying: "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?" he said.

"Britain is worse off in absolute terms, but a straw man has been knocked down. A prelude to how the pro-EU side will fight the referendum."

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