Britain gets deal to halve EU budget surcharge bill

Britain has negotiated a halving of a £1.7 billion budget surcharge it has to pay to the European Union after negotiations with EU officials, British finance minister George Osborne said on Friday.

“Instead of footing the bill we have halved the bill, we have delayed the bill, we will pay no interest on the bill, if there are mistakes in the bill we will get our money back,” Mr Osborne told reporters in Brussels.

“It is a real result for Britain,” he said.

Mr Osborne said Britain would pay the surcharge in two installments in the second half of next year.

Speaking on his way into today’s meeting, the British chancellor had said that the demand that Britain pays £1.7 billion by December 1st was “unacceptable.” At last month’s summit of EU leaders it emerged that Britain, and a number of other EU countries including Ireland, must pay an extra contribution to the EU budget to reflect their improving economies and a re-calculation of gross national income figures.

The Italian presidency of the Council of the European Union had been working to find a compromise solution, with Minister for Finance Michael Noonan saying yesterday he believed a proposal to pay the bill by instalments over 2015 was on the table.

British prime minister David Cameron told the House of Commons this week that he would not pay the proposed amount, and this is understood to have the support of Italy and the Netherlands.

The British PM has pledged to hold a referendum on EU membership by 2017 should the Conservatives win next year’s general elections. But Mr Cameron has raised the ire of a number of EU leaders, including German Chancellor Angela Merkel, by suggesting that EU freedom of movement rules may be changed. Immigration has emerged as the focus-point for Mr Cameron’s bid to renegotiate British membership of the European Union, as he tries to tackle the rising threat of the anti-immigration UK Independence Party.

The defection of Tory MP Douglas Carswell to the UK Independence Party (UKIP), winning the eurosceptic party its first Westminster seat last month, has rattled the Conservatives less than seven months out from a general election. A second by-election in Rochester on November 20th, could deliver a second UKIP seat.

Mr Cameron is expected to deliver a speech before the end of the year outlining his proposed renegotiation strategy.

Additional reporting: Reuters