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Last Updated: Thursday, 8 July, 2004, 17:23 GMT 18:23 UK
No 10 defends British EU rebate
European Union flags
Thatcher demand British money back in 1984
Britain's European Union budget rebate is "fully justified", Downing Street has insisted as officials in Brussels push for a review of the deal.

Margaret Thatcher secured the rebate, currently worth about 2bn a year, in 1984. The UK continues to have a veto over any changes to the rebate.

EU budget commissioner Michaele Schreyer is proposing changes to the amounts big EU countries contribute.

But No 10 said it would continue to fight to keep the rebate.

General refund

Tony Blair's official spokesman said no proposals had yet been tabled by the EU.

"We will continue to argue that the rebate is fully justified," he said on Thursday.

The spokesman added: "We recognise that, in relative terms to most other EU countries, we have become more prosperous over the past decade, but we still believe the rebate is justified because of the distortions in programmes such as the CAP (Common Agricultural Policy).

Our rebate is not on the table and not up for negotiation.
Treasury statement

"Any change would have to be passed unanimously so that does give us a veto."

Ms Schreyer's plans would reportedly make Britain the biggest net contributor to the EU budget.

She wants to replace the British rebate with a general refund for all big net contributors.

The commissioner told BBC Radio 4's World At One: "I am making a proposal to introduce a generalised correction mechanism where all member states who pay high net contributions would participate.

"The UK would in my proposal be the country with the biggest correction."

Unfair?

Critics of the rebate say it should be cut because Britain has become richer since the deal was negotiated.

Britain originally got the deal because it paid more into the EU budget than it got back, principally because it received less than other countries from the CAP.

Explaining her plan, Ms Schreyer said: "It would be equal treatment of member states so it's the idea of fairness and unfortunately this has not been tackled before."

The British Government had to find an answer to the central budget problem, she said.

"The sums allocated to poor new member states is growing and the British rebate is also growing to the burden of others," she added.

But in a statement, the Treasury signalled its determination to keep the rebate.

It said: "Our rebate remains fully justified. It is not on the table and not up for negotiation. In the constitution we secured a veto over any proposals."

'After our money'

Conservative shadow chancellor Oliver Letwin called the proposed rebate changes a "sick joke".

He said: "Why on earth should we contemplate for a second allowing the commission to get rid of a rebate for which we fought so hard? The answer is no."

Robert Kilroy-Silk, the UK Independence Party MEP, said Ms Schreyer's plans were playing into the hands of what he had claimed during the European election campaign.

"This demonstrates more than anything else that they are after our money and our jobs," he said. "This is not money they give us. It is our money...

"They want us to be on the back foot and for us to appease them. Well, every time we appease them they come back for more."




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