EU penalises UK success..

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David Cameron demands emergency talks over EU budget
Prime Minister interrupts meeting of European Council to tell José Manuel Barroso he has no idea impact of 'surprise' £1.7billion budget hike would have in Britain
David Cameron with Francois Hollande and European Council President Herman van Rompuy, sitting, during the summit
David Cameron with Francois Hollande and European Council President Herman van Rompuy, sitting, during the summit Photo: Olivier Hoslet/EPA
Matthew Holehouse

By Matthew Holehouse, Political Correspondent

10:45AM BST 24 Oct 2014

David Cameron has demanded an emergency meeting of European finance ministers after Britain was told to pay an extra £1.7 billion to the EU budget.

The Prime Minister interrupted a meeting of leaders at the European Council to tell José Manuel Barroso, the president of the European Commission, that he had "no idea" of the impact of the budget hike would have in Britain.

He was ambushed with a demand from the European Commission for the extra money because Britain’s economy has performed better than other economies in Europe since 1995.

Government sources insisted British officials had only learnt of the scale of the revised payment in "recent days".

Treasury officials will seek an explanation from the European Commission as to how the budget hike has been calculated.

Mr Cameron interrupted a discussion of European leaders about the economy to challenge the budget uplift.

"The Prime Minister said to Barroso he had no idea of the impact that these things have - it's not just about public opinion, it's two billion euros," a Government source said.

"It is something we are seeking to challenge. It's rather a large amount of money. The first thing is to discover precisely what the basis for the increase is."

Prime Minister Renzi of Italy, which has also been hit by an invoice for increased payments, backed up Mr Cameron.

The Prime Minister held talks at the European Council summit in Brussels on Thursday night with Dutch counterpart Mark Rutte, who is facing a similar surcharge, on how they can challenge the demand for cash.

The surcharge - which would add almost a fifth to the UK's annual contribution of £8.6 billion - is intended to reflect Britain's better-than-expected economic performance relative to other EU states.

It results from an EU recalculation of national incomes dating back to 1995 and taking into account recent changes in the rules to include economic activities such as prostitution and illegal drugs.

Preliminary figures seen by the Financial Times suggest that Britain is facing by far the biggest top-up, while the Netherlands is being asked for an extra €642 million (£506 million).

By contrast, Germany receives a rebate of €779 million (£614 million), France €1 billion (£788.7 million) and Poland €316 million (£249 million).

David Cameron arrives at the start of the second day of the European head of states summit in Brussels (Stephanie Lecocq/EPA)

The demand was met with outrage by Eurosceptics.

John Redwood, the former Tory trade secretary, said Mr Cameron should refuse to pay - and should amend the law if necessary to make clear the UK regards the demand as "illegal and unacceptable".

Mr Redwood told the BBC Radio 4's Today programme: "This is a very large increase in tax on the British people, imposed retrospectively without their permission.

"It offends all our principles of natural justice and fair taxation. The British people are already paying too much tax and he last thing they intend to do is sent another £1.7 billion to the Commission so that they can behave in the way they just have overnight."

Patrick O'Flynn, a Ukip MEP, said: "The EU's budget surcharge is effectively asking UK taxpayers to fork out for the disaster of the Eurozone. Totally outrageous."

Mark Pritchard, a Conservative MP for The Wrekin, said: "The timing and content of the EU budget demand shows how inept Brussels is. Brussels needs to work with the UK Government, not work against it.

"Unless this behaviour changes, the EU referendum could be brought forward. Europe should not penalise the UK's economic success whilst rewarding France's economic failure."

The surcharge is due for payment on December 1 - just days after the Rochester and Strood vote on November 20.

Peter Bone, the Conservative MP for Wellingborough, said: "We are just being taken for a ride. We are paying more and more in and getting nothing in return.

"Roll on the referendum - this will just strengthen the resolve of the British public to get out of this superstate.

"They are trying to rub David Cameron's nose in the dirt for having the audacity to stand up and say freedom of movement is wrong."

Labour and the Liberal Democrats also said the demand was unacceptable.

The payment, described by officials as a “surcharge” follows a change to the way the EU calculates gross national income to include previous hidden service industries, including such prostitution and illegal drugs.

Britain, which has a large service sector, has had its national income revised upwards to reflect a higher pace of growth compared to other countries.

There is already a scheduled meeting of European finance ministers on Novermber 7. Brussels officials said that it would be "highly unlikely" to organise an emergency meeting, but the agenda of that meeting could be changed.
 
Please do correct me if I'm wrong, but isnt the charge now due because of the UK under-declaring GDP revenues in the 1st place ?

I remember a few weeks ago when various agencies were pointing out that the UK growth-rate has been under-calculated for some yrs now. If so, then this tax-demand is similar to the VAT-man going after the plumber who's under-declared earnings on his annual tax-returns.

And wouldnt the 'hidden service industries' quotient not be used in the calculations of the other 27 EU countries too - unless of course your argument is that the UK is the only country out of 28 which has prostitution and drug-dealing.'

 
I'm opposed to any form of censorship of our economic efficiency and this is a penalty for making our economy work better than other countries. Then, what is so annoying is that other countries who make worse progress with their economies, get a handout (France and Germany). For me, we need to get out of this unequal coalition of states. They only want us in so that they can plunder our economy.
 
DarthCrooks - 24/10/2014 14:39

Please do correct me if I'm wrong, but isnt the charge now due because of the UK under-declaring GDP revenues in the 1st place ?

I remember a few weeks ago when various agencies were pointing out that the UK growth-rate has been under-calculated for some yrs now. If so, then this tax-demand is similar to the VAT-man going after the plumber who's under-declared earnings on his annual tax-returns.

And wouldnt the 'hidden service industries' quotient not be used in the calculations of the other 27 EU countries too - unless of course your argument is that the UK is the only country out of 28 which has prostitution and drug-dealing.'
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No, you are wrong, the goal-posts were moved in Sept 2013 and implemented in introduced in Sept this year.

The goal-posts were changed in as much as ESA 2010 (a new European 'standard' for calculating a countries GDP) - what wasn't clear is that this new EU adoption would be retrospectively applied to EU economies - so it's more the equivalent of a UK tax going up and then your plumber being charged for previous years income based on these newly introduced higher charges.

What we do know is this, this sum may yet go up substantially (one estimate I've just read is that our final bill may well be around 50% higher than the interim just sent in)....of course, we will now argue it should be lower.

Annual fees to the EU and the EU budget is supposedly fixed for years in advance, which makes this new additional charge even more nonsensical.

Sooner we get out, the better.
 
To my understanding the (Gross National Income( GNI) calculations for all 28 now incl. the black-economy within nations as far as they've been able to calculate them. it isnt just Brussels picking on poor old UK as the Media paint as it also tries to account for eg. Italy's cash-in-hand dealings and mafia industries as well as Greece's, hence both these countries too having to pay more despite their economies shrinking.

In fact, the GNI recalculations are based on figures since 2002 for all but one member state (whose recalculation is for figures since 1995).
Therefore you could even argue that countries whose growth has been significantly revised upwards had previously been underpaying when it came to EU contributions. Strictly speaking, the recalculation isn’t due to better performance, but to past mismeasurement of GNI, and thus the under-payments for yrs and yrs.


no doubt getting out of the EU would be v.good for the top 10% or so of any country thats in the EU - more power to Capital and less to the workers. not quite so great for the majority of us who will have our rights eroded away to the scenario in the USA, which is no doubt the end-game objective - ultimately, this will not happen.
 
all member-states knew of how GNI was to now be used and all agreed to this revision to a tee. Reason being this has allowed many countries to show better than previously thought economic growth and, in some cases, a smaller debt relative to GDP - thus helping their bond-yields.

it is highly unlikely that member states did not know, or did not anticipate, these figures, as calculations are even based on data provided by member state governments themselves, which Eurostat, the EU’s statistical institution, then verifies - so much for all the indignation and surprise (which is just so much playing to the populist national gallery by Cameron et al).

Caneron and Boy George knew about all this coming long before they admitted to it.
 
DarthCrooks - 28/10/2014 20:12

To my understanding the (Gross National Income( GNI) calculations for all 28 now incl. the black-economy within nations as far as they've been able to calculate them. it isnt just Brussels picking on poor old UK as the Media paint as it also tries to account for eg. Italy's cash-in-hand dealings and mafia industries as well as Greece's, hence both these countries too having to pay more despite their economies shrinking.

In fact, the GNI recalculations are based on figures since 2002 for all but one member state (whose recalculation is for figures since 1995).
Therefore you could even argue that countries whose growth has been significantly revised upwards had previously been underpaying when it came to EU contributions. Strictly speaking, the recalculation isn’t due to better performance, but to past mismeasurement of GNI, and thus the under-payments for yrs and yrs.


no doubt getting out of the EU would be v.good for the top 10% or so of any country thats in the EU - more power to Capital and less to the workers. not quite so great for the majority of us who will have our rights eroded away to the scenario in the USA, which is no doubt the end-game objective - ultimately, this will not happen.
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No one said it was the EU 'just' picking on the UK.

The GNI revisions are as you say all based primarily on black market revisions - something which is about as accurate as as doing backwards calculations for previous years black market estimates.

The system, the approach is utterly nonsensical - and is likely to get worse before it is corrected.

Who knew what when is yet to be determined, whether they understood what this adoption would cost is mute, it shouldn't have happened in the first place.

There is too much evidence now accumulated to show that we'd actually be better off financially being out of this mess, our exports to the rest of the world now outstrip those to the EU and continue to grow whereas those to the EU shrink.

Even if our balance of payments declines (unlikely) being able to control our own borders and allowing us to decide who we need to come and who we don't would be a major step forward - Tax credits and benefits payments for overseas EU residents that once came here and have now return but who are 'low paid' (by our standards or out of work) are now costing us in excess of £100 mill per week.

There is also a strong evidence base that these huge influxes continual to create downwards pressure on wages for unskilled workers already in the UK, so far from being worse off, if we were out of this mess, chances are they'd be far far better off.
 
The system gives the EU arbitrary powers to source funds. A bureaucrats wet dream.
 
1) ALL member-states including UK KNEW about this revision to calculate GNI and they all agreed to this, as it gives a far more accurate picture (not perfect still) of the actual true economic picture. the 'black-economy' calculations were deliberately on the conservative side (by all countries) and in anyway its national set of figures were produced and passed to Brussels by its countries very own institutions like the ONS for the UK.

2) as I said, all countries knew and agreed to this revision over a year ago at the least, and so the upside for each government politically as it would generally show higher growth-rates per country, thus allowing said governments to bask in those higher growth-rates - also economically, they benefit as the Market would then charge them less interest for new national-bonds (Treasuries in UK) as well as corporate and other bond yields and mortgage-rates also coming down proportionately as they all use the governmental-bonds as their benchmark.

3) retrospective payments have ALWAYS been used to correct contributions when more accurate-figures are supplied down the line. the records will show the famous case of Thatcher 'winning' a rebate in excess of 5 billion pounds from Brussels around 3 DECADES ago..... I dont remember too many dissenters about rerospective-action about that for some reason - funny that.

4) the trade with the 'rest of the world' as a percentage of total trade is increasing for every single country in Europe and N.America as the Far-East rises economically, so I don't know why you mention it. but STILL the EU is our biggest trading-partner as a percentage of total trade. If we're outside of it, then there is such a thing as tarriffs to negotiate, if you think they would allow us 'free-trade' after we cherry-pick which rules we'll be party to and which we don't particularly care for.... forget about being like Norway or the Swiss, they will want their pound of flesh and not allow similar status for the UK.

4) downward pressure on wages can be easily corrected by raising the minimum-wage - it really is that simple.
 
DarthCrooks - 29/10/2014 09:31

1) ALL member-states including UK KNEW about this revision to calculate GNI and they all agreed to this, as it gives a far more accurate picture (not perfect still) of the actual true economic picture. the 'black-economy' calculations were deliberately on the conservative side (by all countries) and in anyway its national set of figures were produced and passed to Brussels by its countries very own institutions like the ONS for the UK.

2) as I said, all countries knew and agreed to this revision over a year ago at the least, and so the upside for each government politically as it would generally show higher growth-rates per country, thus allowing said governments to bask in those higher growth-rates - also economically, they benefit as the Market would then charge them less interest for new national-bonds (Treasuries in UK) as well as corporate and other bond yields and mortgage-rates also coming down proportionately as they all use the governmental-bonds as their benchmark.

3) retrospective payments have ALWAYS been used to correct contributions when more accurate-figures are supplied down the line. the records will show the famous case of Thatcher 'winning' a rebate in excess of 5 billion pounds from Brussels around 3 DECADES ago..... I dont remember too many dissenters about rerospective-action about that for some reason - funny that.

4) the trade with the 'rest of the world' as a percentage of total trade is increasing for every single country in Europe and N.America as the Far-East rises economically, so I don't know why you mention it. but STILL the EU is our biggest trading-partner as a percentage of total trade. If we're outside of it, then there is such a thing as tarriffs to negotiate, if you think they would allow us 'free-trade' after we cherry-pick which rules we'll be party to and which we don't particularly care for.... forget about being like Norway or the Swiss, they will want their pound of flesh and not allow similar status for the UK.

4) downward pressure on wages can be easily corrected by raising the minimum-wage - it really is that simple.
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Almost all of that is supposition and largely rhetoric based on poor analysis.
 
please do specify which are suppositions, as for 'rhetoric' I've quoted you definitive terms of references eg. ONS, Eurostat, specific about recalculations from exactly what yr, the great 'Thatcher rebate' won in the 80s, etc. etc.

if you (and all other 27 countries) agreed to the new calculus over a year agao, then subsequently your own national agency (ONS) produce/collate the figures that the government then present to Eurostat for rubber-stamping... how could you NOT know what the resulting recalculations would be ?

if theres a miniscule chance that you as a government of hardnosed season politicians with advisors and special-advisors didnt know, then it would point to a gross incompetence on their part.
 
No, you haven't. You've assumed that our stated terms of reference have been part of the recalculation, whereas they haven't.

There is a huge gulf between base data and any summations/calculations that are being interpreted under ESA.

Unless you're being deliberately obtuse or not reading what I wrote it is the implementation and the interpretation of the ESA that is the root cause of this EU generated bill.

Gross incompetence is more than likely - and as yet, as I said this has yet to be established with prima facie evidence.
 
the recalculations using the government's own agency supplied data are based on a set formula which is detailed presumably in this ESA 2010 that you quote. whatever the document is that contains it, the process is set to a mathematical basis and thus leaves no room for subjective interpretation.

if the formula wasnt necessarily water-tight then it would forever leave countries to argue the toss whenever on occasion they have to cough up (as opposed to when it works the other way and get a rebate, when they for some reason seem to accept the calculations).

I see even Cameron's staunch ally Denmark has now come out to say that the UK will have to pay this 1.7bn owing - running out of friends even faster now.
 
DarthCrooks - 29/10/2014 11:48

the recalculations using the government's own agency supplied data are based on a set formula which is detailed presumably in this ESA 2010 that you quote. whatever the document is that contains it, the process is set to a mathematical basis and thus leaves no room for subjective interpretation.

if the formula wasnt necessarily water-tight then it would forever leave countries to argue the toss whenever on occasion they have to cough up (as opposed to when it works the other way and get a rebate, when they for some reason seem to accept the calculations).

I see even Cameron's staunch ally Denmark has now come out to say that the UK will have to pay this 1.7bn owing - running out of friends even faster now.
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That's great news, the quicker we shed ourselves of the delusion that we have 'friends' the EU, the quicker and faster we can start realising our place is best to be outside it.
 
won't happen.... for the simple reason that the majority actually benefit enormously infree- access to the EU market, free-movement that also has allowed 100s of 1000s of UK nationals to move, live and work abroad, FDI to UK as a means to enter EU market, millions go on holiday there with no need for medical-insurance due to reciprocity-agreements, etc etc

now that UKIP has emerged and the centre-right vote will be finally split, as the centre-left has been for decades... there will be no referendum.

even if there was, most ppl once they hear BOTH sides will vote to stay in, as most ppl in UK vote centre-left.
 
DarthCrooks - 29/10/2014 12:18

won't happen.... for the simple reason that the majority actually benefit enormously infree- access to the EU market, free-movement that also has allowed 100s of 1000s of UK nationals to move, live and work abroad, FDI to UK as a means to enter EU market, millions go on holiday there with no need for medical-insurance due to reciprocity-agreements, etc etc

now that UKIP has emerged and the centre-right vote will be finally split, as the centre-left has been for decades... there will be no referendum.

even if there was, most ppl once they hear BOTH sides will vote to stay in, as most ppl in UK vote centre-left.
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It still amuses me that so many point to 'benefits' that non-EU members also enjoy yet aren't in this ever increasing costly and non-democratic club.

Even if the upside was worth that much (which it isn't) the down side costs are far outweighing them.

Fortunately, the electorate is finally waking up to this, most especially as the single biggest class of voters moving to UKIP are ex-Labour ones...

 
actually not sure that true... there are some disaffected Labour voters (mainly white working-class ones) that have (and are) making protest-votes with UKIP, but come the election time many more centre-right will be going UKIP than Labour voters... and Labour should be the main beneficiary of disillusioned Liberal voters.

theres plenty of upside, but the Press-baron plutocrats that own the Media here fear there decreasing influence unde EU 'encroachment' and so you never get to hear about it.

if it does go to a referendum (unlikely IMO) then the other side of the coin will be coming out, and increasingly so.... also, the Eurozone teething-problems will be increasingly in the rear-view mirror by 2017.
 
DarthCrooks - 29/10/2014 12:34

actually not sure that true... there are some disaffected Labour voters (mainly white working-class ones) that have (and are) making protest-votes with UKIP, but come the election time many more centre-right will be going UKIP than Labour voters... and Labour should be the main beneficiary of disillusioned Liberal voters.

theres plenty of upside, but the Press-baron plutocrats that own the Media here fear there decreasing influence unde EU 'encroachment' and so you never get to hear about it.

if it does go to a referendum (unlikely IMO) then the other side of the coin will be coming out, and increasingly so.... also, the Eurozone teething-problems will be increasingly in the rear-view mirror by 2017.
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The telegraph and one of the Conservatives biggest backers both in their polls and analysis point to a surge in disaffected labours supporters moving to UKIP - I've previously posted these here before when they were first published.

"the Eurozone teething-problems will be increasingly in the rear-view mirror by 2017..."

That's almost too funny for words.
 
LOL

well then, looks like youve got nowt to worry about as the Tories look a shoe-in at the next election. we'll all have our referendum and the lets get outs will trounce the stay-ins comfortably.

I didnt think it was gonna be so easy for you.. shows what I know I guess.

(btw, have you told that nice Mr Levy how great the Saints strategy is proving to be yet - ' buy less get more' is the new zeitgeist after all)
 
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