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02/12/2016

UK’s Osborne accused of claiming false victory in EU budget row

UK & Europe

UK’s Osborne accused of claiming false victory in EU budget row

Mateusz Szczurek, George Osborne, and Lord Hill. [EU Council]

British finance minister George Osborne was criticised by the head of a parliamentary committee on Wednesday (17 December) for claiming victory in a row with the European Union over an unexpected bill that triggered a diplomatic bust up with EU officials.

In November, a statistical review of national income data generated a 2.1 billion euro bill that caught Prime Minster David Cameron by surprise, provoking a furious response.

The row inflamed tensions with Cameron’s European counterparts and agitated the rebellious Eurosceptic wing of his Conservative party, at a time when rising anti-EU sentiment among voters has forced Britain to contemplate leaving the bloc.

>> Read: Budget row escalates as UK bill could reach €3.6bn

Osborne later claimed success in the budget battle, saying Britain would pay only half of what Brussels demanded, but EU officials said payment had not been reduced, only offset, and domestic political rivals accused Osborne of deception.

>> Read: UK claims victory over €2.1 billion budget bill

On Wednesday, Osborne was criticised by parliament’s Treasury Select Committee, which said the reduction was down to a rebate that was due to be paid anyway.

“It seems to me … the bottom line didn’t change a scrap,” said committee chairman Andrew Tyrie, a Conservative lawmaker and respected former Treasury minister whose criticism will come as an embarrassment to Osborne.

Giving evidence to the session scrutinising his department, Osborne disagreed, saying that it had not been clear the rebate, which cut the bill by around a billion euros, was due to be disbursed.

Osborne maintained that he had successfully fought to protect the British taxpayer.

“Having looked at the papers it seems to me pretty clear, and I’m surprised that you feel … that it wasn’t really clear,” Tyrie said to senior Treasury official Mark Bowman who appeared before the committee alongside Osborne.

Background

Britain was asked in October to make a €2.1 billion top up into the EU budget by 1 December or face punitive interest payments.

UK Prime Minister David Cameron vowed Britain would not pay the €2.1 billion bill, saying it was “an appalling way to behave”.

>> Read: Furious Cameron vows not to pay EU budget bill

The top up came about because of a historic statistical review of national GDP, which saw other countries, such as Germany and France, get rebates under the plans.

While other countries, such as the Netherlands, were also hit by demands for payment, the UK’s proposed contribution is by far the largest.

The matter was settled in November with an agreement that Britain would pay only half its bill for the time being.

>> Read: UK claims victory over €2.1 billion budget bill