Page last updated at 15:42 GMT, Saturday, 31 October 2009

16 December 1981: Thatcher demands a rebate

European Parliament, Strasbourg

It was to become an argument that dominated Britain's relationship with the European Union.

The question of how much the UK pays into the Union balanced with how much it gets in return has long been a thorny issue - and Mrs Thatcher made determined efforts to redress what she and others saw as an unfair situation.

In 1980, the European Commission agreed to look into the issue, and it was brought up by Mrs Thatcher at the outset of her first speech to the European Parliament in 1981.

With spending on agriculture taking up around 70% of the EU's budget at that time, but with the UK having a relatively small farming sector, it was felt that Britain got a raw deal.

Tough negotiations led to a deal being struck in 1984, when at the time, the UK was the third poorest country of the European Economic Community (as the EU was then known).

Despite pressure for change, that rebate still exists.

Following deadlock in the 2005 Budget negotiations, a compromise was struck, with the UK agreeing to give up around 20% of the rebate for the period 2007-13.

Despite the deal, the rebate is still worth around 6.3 billion euros a year.

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