MPs cast doubt on Osborne’s EU bill claim

27 Feb 15

Chancellor George Osborne’s claim that he halved the UK government’s £1.7bn bill from the European Commission late last year is ‘not supported by published information’, the Treasury select committee has concluded.

Examining the negotiations undertaken after the demand for additional funds, which was based on a new measure of economic growth, MPs said the Treasury should have known that the UK’s rebate would apply to the bill.

The rebate reduced the bill by £850m, and the committee said that on the basis of the evidence it had seen it should have been ‘unambiguously clear’ the demand would fall.

Following a European meeting last November, Osborne said the bill had been halved. Both the chancellor and Mark Bowman, the Treasury’s director general for international and EU, told MPs there had been ‘real doubt’ the rebate would apply. They claimed this were due to the revisions being made on an unprecedented scale, the complexity of the calculation and the fact the European Commission did not mention the rebate when it initially presented the £1.7bn bill.

However, the committee said it was not persuaded that these doubts were genuine.

‘The complexity of the rebate calculation does not make it less certain, less clear or ambiguous. On the contrary, the complex and detailed published explanation of the method of calculation has the effect of reducing ambiguity and uncertainty,’ the report stated.

‘In fact, the question of whether the commission had mentioned the rebate when the increased bill was first presented has no bearing on whether, under EU legislation, the rebate was bound to apply or not. It is surprising that Treasury officials had not realised this.’

Committee chair Andrew Tyrie added that, by claiming he had halved the demand, Osborne had diverted attention from the fact he had been able to introduce new rules to allow EU members to delay payment of these bills.

‘The suggestion that the £1.7bn bill demanded by the European Union was halved is not supported by published information,’ he said.

‘The terms of the UK’s rebate calculation are set out in EU law. It should, therefore, have been clear that the rebate would apply. The government got a good deal for the UK by securing an interest-free delay to the EU bill. But by overstating its success on the rebate, it distracted attention from this achievement.’

Responding to the report, a Treasury spokesman said the deal Osborne secured ‘was not a technical clarification, it was a hard fought negotiation that halved the payment and delivered a real result for Britain’.

He added: ‘We note that the Treasury Committee did not raise the possibility of the rebate applying at any point before the result of the negotiation was announced.’

 

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