eurealist.co.uk

Horse Trading

The President of the European Commission José Manuel Barroso has stepped into the ring to announce that the British Rebate is now no longer justified. He said a way would be found that met Britain’s legitimate concerns. Although Britain could use its veto to block proposals that removed or diluted its rebate, but doing so would risk undermining alliances on other issues.

Arguing that part of the reason for agreeing the rebate was to compensate Britain for taking proportionately less in agricultural subsidies than other large countries such as France. But that too had changed as the Common Agricultural Policy took up less of Europe’s budget. The rebate was found for Britain because there was legitimate concern of Britain, almost 70 per cent of our expenditures in the European Commission were with agriculture. And now in the proposal that we are putting forward it will be about a third.”

I would have thought that the overall increase in expenditure in other areas would not affect the original concern, unless the actual expenditure on CAP had fallen. Barroso seems to be making the point that because the other expenditure had increased this somehow undermines the relevance of the rebate.

Without it the rebate, Britain would have paid 14 times as much as France or Italy to the EU according to the Treasury forecasts, even with retaining the rebate, Britain’s net contribution will nearly double from £2.6 billion this year to £5.1 billion in 2007-2008. A House of Lords report says Britain gets a worse deal from the European Union, paying more money in and getting less out, than almost every other member state. The report shows that without its rebate Britain would be the largest net contributor to the EU, and even after the rebate it is the second biggest after Germany.

Another point is Structural funds, distribution of EU funds regional development money, accounts for the second-largest share of the EU budget and Brown wants to shift such funding back to national governments. Although all of us taxpayers contribute to the EU budget, only those groups selected by the EU get money back. This control of funding is one of the ways the Commission has used to increase its influence over our national policies, as the money is only given to those groups which meet Commission approval on several fronts, the funding advances the power of the EU to the detriment of the nation state. At the very least it allows the impression to develop that it is the EU which is spending its money in the UK, which is a bit rich considering it is our money in the first place.

A cost-benefit analysis of EU membership has been refused by Tony Blair however one published by Civitas estimates the annual burden on Britain of regulation, the CAP and the budget at four per cent of GDP. This burden will become more onerous if the constitution is ratified.

One thing is certain the cost of our membership of the Union is set to double in the next two to three years, and with the likely loss of the rebate added in on top of this, Gordon Brown’s budget forecast will be blown of course and an increase in tax will have to be made to meet the shortfall. So any arguments of the benefits of the Union, must be balanced by these increasing costs to every taxpayer in the country.