EU budget: what's happening to the British rebate?

"OUTRAGE erupted last night after a secret European Union plot to grab £5.6billlion more from British taxpayers was exposed [...] The move would slash Britain's annual rebate from the European Union, won in hard-fought negotiations by Margaret Thatcher in 1984." [emphasis added]

Daily Express, November 15, 2012

"EU summit chair says rebate is being retained, but changes to way it is calculated mean cut of €1bn a year, say UK officials"

The Guardian, November 15, 2012

Next Thursday the European Union Council will convene to reach an agreement on the EU budget for the next seven years. 

Today's Daily Express puts the spotlight on a "secret European Union plot to grab £5.6 billlion more from British taxpayers." It's been frequently reported by the press that the European Parliament is pushing for a spending increase. So, exactly how secret is this plot? 

The evidence is a "leaked document from EU Council President Herman Van Rompuy" detailing proposals for raising the UK's payment to Brussels by £800million a year for the next seven years.

However, the Guardian makes no mention of a leaked document or of plans to increase our country's contribution to the EU budget. What the Guardian does mention is a new seven-year budget proposal drafted by the chair of the summit and presindent of the European council, Herman Van Rompuy, which would slash "the original figures from the European Commission by between 75bn and 81bn euros."

The discrepancy between the two accounts is even more marked when it comes to explaining how the UK rebate is being affected by the new budget draft. 

The UK rebate was introduced in 1984 because approximately 41% of the EU budget is spent on the common agricultural policy, which does not benefit Britain as much as other EU countries. It is calculated as more or less two thirds of the difference between the UK's contribution and what it receives back from the EU budget.

How much is it worth? 

According to the Express, "the UK is paid an annual rebate worth around £3.2 billion." The Guardian wrote that last year the rebate was worth €3.6 billion. 

In this instance, the Guardian is closer to the correct figure. According to the 2011 EU Financial report, the UK rebate for last year was €3.595 billion. That's an equivalent of £2.88 billion pounds. 

Is the rebate being scrapped? 

According to the Express the move from Brussels' "move would slash Britain's annual rebate from the European Union, won in hard-fought negotiations by Margaret Thatcher in 1984." 

But the Guardian says it might only be cut by around 28% or one billion euros a year, or 800 million pounds. This is due to "changes to the way it is calculated." 

So who's right? 

It is worth bearing in mind that the figures reported are still at the stage of being rumour, and will be officialised next week at the scheduled summit. It seems the rebate will likely be cut, rather than scrapped, and the loss for the UK would be £800 million, as both papers reported. This doesn't mean an increase in spending, but rather a reduction in reimbursements. 

Overall one could argue that both papers are somewhat right, though they are reporting the story with a markedly different angle. So much so that one could be forgiven for assuming the Guardian and the Express journalists went to two separate EU budget meetings. 

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Flickr image courtesy of European Parliament