Tag Archives: £1.7 billion

Osborne rebuked over EU surcharge reduction claim

It’s official – George Osborne lied when he said he had halved the £1.7 billion EU budget surcharge, and his claim that he had achieved a “real result for Britain” was nonsense.

This is how George Osborne probably looked after the fire in his pants caused by his incessant lying about the EU’s £1.7bn bill burned away the rest of his suit. Note that his briefcase is still empty of policies and all he has to offer us is the carrot of false promises [Image: Kaya Mar www.kayamarart.com].

This is how George Osborne probably looked after the fire in his pants caused by his incessant lying about the EU’s £1.7bn bill burned away the rest of his suit. Note that his briefcase is still empty of policies and all he has to offer us is the carrot of false promises [Image: Kaya Mar www.kayamarart.com].

Even more stinging must be the fact that this rebuke comes from a fellow Conservative – Andrew Tyrie, chairman of the House of Commons Treasury Committee.

“The suggestion that the £1.7 billion bill demanded by the European Union was halved is not supported by published information,” he said in a report by the committee.

“The terms of the UK’s rebate calculation are set out in EU law. It should, therefore, have been clear that the rebate would apply.”

The Treasury Committee’s report confirms what Vox Political stated the day after Osborne made his ill-advised claim.

Its report did, however, recognise the government’s “achievement” in extending the payment period and avoiding interest charges – although this was managed in conjunction with every other EU member state that found itself facing the prospect of extra payments, and was not an achievement of the UK government alone.

What does Her Majesty’s Loyal Opposition have to say about this? At the time, Shadow Chancellor Ed Balls told us, “David Cameron and George Osborne are trying to take the British people for fools.”

Has Labour’s attitude softened? No.

“This damning cross-party report exposes George Osborne’s claim to have halved the EU budget surcharge to be totally untrue,” said Chris Leslie, Labour’s Shadow Chief Secretary to the Treasury.

“He must now apologise to taxpayers for making this completely false claim.

“Too many times this Chancellor has desperately tried to use smoke and mirrors to fool the British people. He has been caught out again and his credibility is further undermined.

“People will now treat the false claims he makes in the coming weeks with the contempt they deserve.”

And that is the problem for our part-time Chancellor.

He has undermined his own credibility and that of his party.

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The UK’s EU surcharge (another blow for Osborne) – Second Reading

[Image: Left Futures.]

[Image: Left Futures.]

At first glance, this article from the House of Commons Library blog didn’t look as though it was going to contribute anything new.

We know why the UK had to pay a surcharge to the EU based on its economy performance from 2002 until 2013 (according to this article; 2009 according to some others). We know that it relates to the EU budget because member states pay a proportion of their gross national income into the EU’s coffers in return for membership. We know that the revision goes back to 2002 because the EU disagreed with the way some member states had worked out their figures. We know that the question of whether the rebate would always apply to this payment is hotly debated.

But then the article states:

“Concessions have been reached on the timing and staging of payments. Member States will be able to pay in stages with payment completed by 1 September 2015. The original amending budget required a single payment to be made by 1 December 2014.

Member States paying later will not incur interest charges for doing so. Regulations would have allowed for interest payments of 2 percentage points above the base rate, increasing by a 0.25 percentage point for each month of delay.” [Boldings mine.]

Didn’t Osborne come back from Europe saying he had negotiated concessions for the UK? What’s all this “member states” business?

For example, on Radio 4’s Today programme on Saturday (November 9), he said: “This is a real win for British taxpayers… It’s another sign this government can get a good deal for Britain in Europe.” [Bolding, again, mine.]

There’s no mention of the other member states in his renegotiation story at all! Osborne makes it look as though he negotiated a deal for the UK that the other states agreed…

… In fact, it seems all member states agreed on a deal that would affect all member states.

For all we know, Osborne could have sat at the back of the room and twiddled his thumbs. The more we learn about this deal, the less significant his role seems to be.

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Balls blasts Osborne’s EU surcharge ‘fog and bluster’

Not impressed: Members of the Labour front bench display their incredulity at George Osborne's claims during today's debate.

Not impressed: Members of the Labour front bench display their incredulity at George Osborne’s claims during today’s debate.

It’s always fun to see George Osborne being put on the back foot, and today’s attempt at justifying his over-extravagant claims (or indeed lies) about gaining a concession from Europe over its £1.7 billion surcharge was a classic of its kind – even more so because he allowd himself to be flattered into lying to Parliament.

This blog was one of many who challenged his claim within minutes of it having been made, so it was a joy to see Osborne dragged to the House of Commons to answer Ed Balls’ urgent question – a demand for a statement on the matter in which Osborne repeated the claims we’ve heard before: He’d halved the bill, he’d delayed the bill, he’ll pay no interest on the bill.

We know he hasn’t halved it; all that happened was the EU took pity on him and agreed to bring forward a rebate that was coming to the UK in any event, meaning that – instead of receiving some money back from the Union – we’re just paying less in.

It is likely that pity also applied in the decision to delay payment of the bill until the next financial year – one can picture the scene: Osborne imploring, “Please don’t make me pay! The deficit is already out of control this year and you’re asking me to add another billion to it!” – and the decision not to demand interest for every day’s non-payment after December 1. In fact, with an agreement to defer payment until the 2015-16 financial year, it would be unfair to demand such interest.

Having won those concessions from a position of weakness, Osborne’s mistake was to come back and pretend that he was in a position of strength. Nobody believed him.

Today, in the House of Commons chamber, even his own backbenchers seemed to find it hard to put up the pretence. Meanwhile, Mr Balls had the floor:

He began: “Talk about smoke and mirrors, Mr Speaker—I can barely see you through the Chancellor’s fog and bluster!”

He quoted the Austrian, Dutch and Irish finance ministers, saying: “They are queuing up to contradict the Chancellor.

“Is it not now clear that the Chancellor totally failed to get a better deal for the taxpayer?” he asked. “He did not reduce Britain’s backdated bill by a single penny. The British people don’t like being taken for fools, and his attempts to fool them have totally unravelled.”

Labour backbencher Geoffrey Robinson had to withdraw his words after claiming Osborne had committed “a gross act of deception worthy more of Goebbels than the British Chancellor of the Exchequer.” Clearly he is a long-term reader of this blog.

Paul Flynn called Osborne’s “result” – as the Chance(llo)r described it – as “a confidence trick”.

Osborne and his pals were deep in their own narrative by then, whining about details of the rebate and the interest rate on the surcharge, and trying to score points with questions about Labour MPs’ loyalty to their leader. Somebody should have told them that a couple of Labour MPs complaining about Ed Miliband is as nothing, compared to the defection of two Tory MPs to UKIP and calls by a further – 22, was it? – for David Cameron’s resignation or removal.

Oh yes… and a Mr James Arbuthnot seemed to think that the surcharge, which came about because the UK economy had performed better than expected over a period of time, was “because of the stunningly impressive handling of the economy by my right hon. Friend”.

To this, Osborne responded: “One of the reasons why this surcharge, as he puts it, has arisen is because of the strong UK economic performance relative to the continent of Europe.” If he had left it there, we would not be able to call this statement what it was. He didn’t; he added: “We should not be happy about the poor performance of the European continent. We want the European continent to be performing better.”

The second part of his statement makes it clear that he is referring to the recent performance of the continental EU countries, meaning that he was applying comments about the UK’s “strong economic performance” to the period when he was Chancellor.

He was lying to Parliament. We all know that the surcharge has arisen because of the UK’s strong economic performance between 2002 and 2009, when Labour was in office, under chancellors named Gordon Brown and Alistair Darling. It had nothing to do with anyone called Osborne.

Having established that lie, there really isn’t any need to go further into the debate. There is no reason to believe anything Osborne says. The Goebbels reference – not permitted in the Commons chamber – is entirely apt; he was trying to feed us The Big Lie.

He failed.

Never mind, George – you’ve succeeded in halving wage growth!

What a shame that it isn’t likely to be a vote-winner for you.

Postscript: Ed Balls is also to be congratulated for his handling of Martha Kearney on the BBC’s The World At One today (Monday). Ms Kearney was in belligerent mood, keen to interrupt Mr Balls before he could make any meaningful points about Labour’s economic plans. He was trying to make the perfectly reasonable point that the UK can clear its debts by building up the economy, but she dismissed this as a project that would take many years to pay off (thanks for the vote of confidence, Martha!) and pressed him to tell her what cuts he would make when he had already clarified what he would rather do instead.

Then she asked why he had not supported the #WeBackEd campaign on Twitter. He pointed out that he had made his support for Mr Miliband perfectly clear in a radio interview at the end of last week, before that campaign had started. “I think that was a silly question,” he concluded – and she had to admit defeat.

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Osborne has NOT halved the EU’s £1.7bn bill

This is how George Osborne probably looked after the fire in his pants caused by his incessant lying about the EU's £1.7bn bill burned away the rest of his suit. Note that his briefcase is still empty of policies and all he has to offer us is the carrot of false promises.

This is how George Osborne probably looked after the fire in his pants caused by his incessant lying about the EU’s £1.7bn bill burned away the rest of his suit. Note that his briefcase is still empty of policies and all he has to offer us is the carrot of false promises [Image: Kaya Mar www.kayamarart.com].

Another Tory lie busted – and in a matter of hours.

George Osborne turned up on TV today, buoyed up by a cloud of his own smugness, announcing that thanks to his amazing Chancellorial skills, the UK will have to pay only half of the £1.7bn budget surcharge demanded by the European Union.

What he didn’t say – at least, not in as many words – was that this was because the EU would be applying a previously-agreed rebate to the charge. It isn’t that the UK will be paying less; simply that the EU won’t be giving back the money that we were due.

It’s as Jacek Dominik, EU Commissioner for Financial Programming and Budget, said on October 27: “Let me point out in this respect that the UK will benefit from the UK rebate for the additional payments in 2014. This will be budgeted in May 2015 when the UK rebate is recalculated.”

Bloomberg News carried a more accurate account than Osborne offered the BBC, stating that “EU finance ministers agreed in principle today to stretch out Britain’s payment of a 2.1 billion-euro ($2.6 billion) bill until September 2015, while leaving the U.K.’s overall contributions to the EU untouched.”

This story made it clear that “Britain failed to win a cut in an extra budget payment demanded by the European Union, complicating Prime Minister David Cameron’s efforts to fend off an anti-EU movement at home.

“The U.K. will pay the whole amount without any penalties attached or interest rates,” Irish Finance Minister Michael Noonan told reporters after the Brussels meeting. “The installments will be paid over a period of time.”

Now let’s go to Shadow Chancellor Ed Balls. Does he think Osborne did a good job? “David Cameron and George Osborne are trying to take the British people for fools.”

Apparently not. “Ministers have failed to get a better deal for the British taxpayer. Not a single penny has been saved for the taxpayer compared to two weeks ago when David Cameron was blustering in Brussels.

“By counting the rebate Britain was due anyway they are desperately trying to claim that the backdated bill for £1.7 billion has somehow been halved. But nobody will fall for this smoke and mirrors. The rebate was never in doubt and in fact was confirmed by the EU Budget Commissioner last month.

“The fact is the Treasury knew about this issue for weeks and weeks, but the Chancellor was asleep on the job. And David Cameron and George Osborne have totally failed to make the alliances we need in Europe to get a better deal for the British taxpayer.”

So the UK is still paying full whack – albeit amortised over a period of time – and George Osborne is a miserable liar.

Vox Political is delighted to have that cleared up.

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Has Osborne halved the EU’s £1.7bn bill?

George Osborne: It seems he can save money when he wants to.

George Osborne: It seems he can save money when he wants to.

The UK will only have to pay half of the £1.7bn budget surcharge demanded by the European Union, according to George Osborne.

The EU itself has yet to make an announcement at the time of writing.

Osborne’s words came after a four-hour meeting of EU finance ministers in Brussels, in which he said it had also been agreed that the UK would pay the money in two interest-free instalments, totalling £850 million, before September 2015.

It seems the Treasury wants to claim it has cut the 2.1bn Euro top-up charge in half by ensuring the UK’s rebate applies to the payment.

But even the BBC’s Tory-supporting Political Editor, ‘Tricky’ Nick Robinson, said the deal would be scrutinised.

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Revealed: Cameron’s lies over Euro bill

– Verbal malfunction: “I’m not going to pay that bill on 1 December. If people think I are- I’m going to- They’ve got another thing coming.” Cameron can’t even announce his complaint properly.

David Cameron has lied and lied again about the £1.7 billion bill from the European Union, it has been revealed.

An investigation by Full Fact has shown that the UK has been taking part in an exercise to revise the way payments are calculated since at least May this year, meaning that discussions on the subject must have been taking place previously.

The Treasury must have known about these discussions, meaning George Osborne would have been aware of them – and this means that Cameron himself should have been told. If he had not, then his government has not been doing its job properly. He says he knew nothing until he was presented with the invoice this week.

Not only that, the amount does not reflect any increase in the size of the UK economy during the current Parliament, but – humiliatingly for Cameron – during the period of the last Labour government. He reckoned it was based on his own government’s (dubious) economic recovery.

The report states: “EU law requires that member states measure the size of their economy according to EU standards. The UK hasn’t been fully compliant with these standards, so statisticians at the ONS have spent the last year revising old estimates of the size of the UK economy. Some, though not all, of these changes have had a generally upward impact on the figures the EU uses to determine the UK’s contribution to its budget.

“The resulting increase in the estimated size of the UK economy relative to other nations – specifically between 2002 and 2009 – is what’s caused the EU to ask for more money. If the Commission had known the size of the UK economy at the time, it would have charged us more, so the £1.7 billion represents the ‘back payments’ following the counting changes.”

There is some good news for Cameron, though. As the bill is for ‘back payments’, it seems likely to reduce in future years – no matter how the economy has performed under his government. His claim that the bill is because his government has turned the economy around is simply balderdash.

And it seems the largest factor in the increased bill has been changes in measuring the contribution of the not-for-profit sector – mainly charities and universities. As universities are currently experiencing a fall in income as their intake from foreign countries drops off due to “unwelcoming” government policies, it seems reasonable to expect that the UK’s contribution will fall.

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The best way forward now is for Cameron to accept the advice of Denmark’s prime minister, Helle Thorning-Schmidt, that he should swallow his pride and pay up.

There’s no reason the UK cannot amortise the amount over a period of time. If it does so in an agreed manner, it may avoid having to pay punitive 2.5-per-cent-per-month interest payments.

But then, Cameron has proven to be an economic idiot and may not understand this.

That’s what happens when you’re born into money; you end up with no idea of its value.

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