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Wednesday, 23 October, 2002, 12:11 GMT 13:11 UK
UK rebuffs Chirac's EU rebate call
Margaret Thatcher in early 1980s
The rebate was won in 1984 by Margaret Thatcher
Foreign Secretary Jack Straw has hit back at French calls for the UK's 2bn a year European Union rebate to be axed.


Even after our abatement the community spends less per head of population in the UK than any other country

Jack Straw
Mr Straw insisted the rebate - famously negotiated in 1984 by Margaret Thatcher - would not be on the agenda at Thursday's summit of EU leaders in Brussels on EU enlargement.

He said he could "understand" why French President Jacques Chirac wanted it scrapped.

But the issue would not be allowed to overshadow reform of EU farm subsidies in preparation for enlargement.

France 'already committed'

Mr Chirac is under pressure to resist changes to the Common Agricultural Policy, of which France is the biggest beneficiary.

But, Mr Straw stressed, the French president had already committed his country to the reform process, which is due to start this year.


The only reason I can think that France has brought it up is as a smokescreen to take attention away from reform of the CAP

Michael Ancram
The same deal, signed in Berlin in 1999, also protected the UK's annual rebate, Mr Straw added.

"The issue of our abatement is not on the agenda.

"Even after our abatement the community spends less per head of population in the UK than any other country," Mr Straw told BBC News 24.

Earlier, a senior Brussels commissioner backed the UK's position.

European Commission budget commissioner Michaele Schreyer told BBC Radio 4's Today programme: "In Berlin in 1999, there was discussion of the UK rebate in connection with enlargement and it was decided at this time.

"The resources decision which decides on the British rebate is in force since 1 January this year so at the moment it is really not on the agenda."

Dr Schreyer said she hoped that in return for the EC's support on the rebate, the UK would back its proposals for reform of Europe's finances, including a shake-up of the CAP.

Unpopular

The UK rebate was originally granted because it was paying more into the EU than it got back, largely because of the relatively small size of its farming industry.

It was agreed at a summit in Fontainebleau, after Margaret Thatcher "handbagged" the community demanding her "money back."

This year, the UK is expected to receive 3bn back, out of gross contributions of about 6.5bn.

The deal runs until at least 2006 and therefore if reopened now, the UK says, it could endanger enlargement.

A government minister said recently the rebate was "written in stone".

But it has always been unpopular with other member states, who have to pay for it.

'Smokescreen'

Conservative shadow foreign secretary Michael Ancram insisted it was "not negotiable".

He told Today: "It was looked at again in 1999. The reasons for it remain justified and it has already been taken account of in preparing the budgets for post-enlargement Europe.

"It isn't a problem. The only reason I can think that France has brought it up is as a smokescreen to take attention away from reform of the CAP."

Liberal Democrat foreign affairs spokesman Menzies Campbell said: "This has all the hallmarks of a 'pre-emptive strike' before the EU summit.

"The British rebate is not up for renegotiation."


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22 Oct 02 | Europe
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