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Last Updated: Saturday, 17 December 2005, 15:12 GMT
Deal moves EU forward, says Blair
Tony Blair

Prime Minister Tony Blair has defended the EU budget deal, which cuts the UK's rebate by 1bn a year for seven years.

The overnight deal allows Europe to move forward, while the UK's offering would pay its share of development in central and eastern Europe, he said.

The rebate remained on all other expenditure and would rise, not fall, due to an overall spending increase for the budget from 2007 to 2013, he added.

But the Tories said Mr Blair had failed to get any returns for his sacrifices.


European leaders agreed the seven-year budget plan after two days of what Mr Blair described as "extraordinarily complicated" talks.

BBC Europe correspondent Tim Franks said the rebate would continue to rise "for a time" because Britain's overall contributions were rising.

They will increase by 63% to 42bn, while French contributions will rise by 116% and those of Italy by 130%.

Tony Blair has chosen to face criticism at home in order, in part, to avoid isolation in Europe
Nick Robinson, BBC political editor

Britain is giving up around 20% of the rebate it would have otherwise received over the seven years.

Although it will rise from its current level, it will be smaller as a proportion of the UK's net contribution to the EU.

The prime minister told BBC Radio 4's Today programme that for the first time Britain's net pay-in was roughly on parity with France.

"So when people talk about the money that Britain's putting in, it's almost as if Britain was putting money in but no one else was," he said.

The budget package is worth 584bn (862bn euros) - an increase on the 575bn (849bn euros) limit Mr Blair originally proposed.

The UK gives up 7bn (10.5bn euros) of its rebate, after initially offering 5.5bn (8bn euros).

Seldom in the course of European negotiations has so much been surrendered for so little
Shadow foreign secretary William Hague
It was agreed the EU will review all its spending in 2008-2009, including the Common Agricultural Policy (CAP), which Mr Blair wants to see reformed as part of a "start from the very beginning" negotiation.

Shadow foreign secretary William Hague said although his party agreed with some of the government's aims it had "spectacularly failed" to get any guarantees in return for its sacrifice.

"Seldom in the course of European negotiations has so much been surrendered for so little," he said.

Liberal Democrat foreign affairs spokesman Sir Menzies Campbell called the deal "a thoroughly disappointing end" to the UK presidency.

"Government tactics have resulted in a reduced rebate but no real progress on CAP reform," Mr Campbell said.

Push for reform

UK Independence Party MEP Nigel Farage called the agreement "game, set and match" to the French.

The CAP would not change until 2014, which was what President Chirac set out to achieve, he said.

I don't work to support these people. I have not agreed to my taxes being given to them.
Christy Andersen, Newcastle

"Tony Blair said he would not surrender any of the rebate unless that was up for grabs."

"Do British taxpayers really want to pay for new sewers in Budapest or a new underground system in Warsaw? I suspect not," he told the BBC.

Speaking from Brussels Mr Blair said it was never his position that those fundamental reforms could be agreed now.

"My case is that you have to ensure that the enlargement can go ahead - and that's the reason for Britain paying its fair share for the cost of economic development."

But he added there was no question of the rebate being given up until there was a fundamental restructuring of the European budget.

"Now for the first time what we have is the process that allows us to do that."

But Mr Blair has insisted it would "enhance Britain's reputation in Europe" and that failing to reach a deal would have done "immense damage" to the national interest.

BBC political editor Nick Robinson said rather than the hoped-for reform of the CAP, or a promise of reform, what had been won was a "comprehensive budget review that may or may not lead to that reform".

While Tony Blair insisted this represented "significant progress" from the offer made to Britain a few months ago, it was weaker than his initial proposals, our correspondent added.

"Tony Blair has chosen to face criticism at home in order, in part, to avoid isolation in Europe. He's also scheduled another row on the British rebate and the CAP, for three of four years' time," he said.

He added that by then neither Mr Blair nor French president Jacques Chirac were likely to be around to take part.

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