Britain will demand changes to the European Union's regional development funds in budget talks this month, including stripping wealthier nations of access to money intended to help poorer areas, the Sunday Telegraph reported.
Prime Minister David Cameron's government suffered an embarrassing defeat in Parliament this week when anti-EU members of his Conservative party teamed up with the opposition to demand a cut in the EU budget.
But Cameron, aware that a real-terms cut could be hard to win in Brussels, is instead pushing for a real-terms freeze in the budget, which would allow it to rise in line with inflation.
The Conservative-led coalition government also believes changes to the regional development funds are achievable, the Telegraph reported, citing a high-level, unnamed source as saying. The prime minister's office declined to comment on the report.
Calling for changes to the way these "structural and cohesion" funds – the second-biggest item in the EU budget – are managed may pacify some Conservative "eurosceptics" who want a looser relationship with Europe based on trade ties.
The European Commission wants €376 billion from member states in the 2014-2020 period for the EU's cohesion funds, which are intended to help level out wealth inequality across the 27-nation bloc.
Some vulnerable areas in Britain such as Cornwall in the southwest and Wales receive funding from that development pot.
Britain was the fourth-biggest net contributor to the EU budget last year with an overall donation of €5.5 billion.
European leaders will meet 22-23 November to thrash out a deal. Cameron has said he wants to reach an agreement but is prepared to use Britain's veto if his demands are not met.
Conservative lawmaker Andrea Leadsom said reform of the cohesion funds was long overdue.
"Every member state gets structural funds," Leadsom wrote in the Telegraph. "Focusing money instead on the genuinely needy, and leaving richer countries to run their own schemes, would leave almost all member states better off, and save the UK approximately £2 billion [€2.5 billion] each year."
The European Commission has asked for €336 billion for cohesion spending in the EU's next seven-year budget (2014-2020) – the so-called Multi-Annual Financial Framework (MFF).
Cohesion policy is the second biggest envelope in the EU's multi-annual budget, after the Common Agricultural Policy.
>> Read EurActiv's LinksDossier: EU Cohesion Policy 2014-2020
Brussels presented on 29 June 2011 its budget plans for 2014-2020, proposing to raise EU spending to €1.025 trillion, up from the current €976 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.
>> Read EurActiv's LinksDossier: EU budget 2014-2020: The €1 trillion deal
- 22-23 Nov.: Special EU summit to debate the EU's long-term budget for 2014-2020.
- 13-14 Dec.: EU summit in Brussels.
- By 31 Dec.: Negotiations on the EU's next seven-year budget expected to wrap up.
- European Commission: Future cohesion policy [FR]
- Danish Presidency compromise on the reform of the Cohesion Policy
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