'Our OWN money back': Thatcher negotiating EU rebate in 1979
Chief EU negotiator, Michel Barnier, is claiming Theresa May should cough up 14 per cent of the bloc’s budget as part of Brexit.
However, this figure, which he has repeatedly quoted, does not reflect the rebate that is applied, which shows he wants to keep back the UK’s final rebate payment of £4.5 billion as part of the negotiations.
Brexiteers are likely to be furious if the EU demands to end the rebate, which was won by Margaret Thatcher in the 1990s, as part of the price of a transition.
Britain won the right to a rebate from Brussels in 1984 to offset the unfair distribution of the farm subsidies across Europe
The figure is the amount of money which returns to the UK from its annual contribution to Brussels.
It reduces the UK’s contribution to the EU budget as the nation gets back 66 per cent of the difference between its share of member states' VAT contributions and its share of EU spending.
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Britain won the right to a rebate from Brussels in 1984 to offset the unfair distribution of the farm subsidies across Europe.
The rebate is seen by many as the biggest concession ever made made by the EU and one of Mrs Thatcher’s greatest achievements.
Senior research fellow at the Jacques Delours Institute, Eulalia Rubio, said to politico: “You have to distinguish between applying the rebate to calculate the Brexit bill, which is on settling past debts, and therefore based on current legislation, and applying it to any hypothetical contribution to the EU budget linked to a future transition agreement.”
At the start of the talks, the EU negotiators tried to tie future payment of the rebate to London paying its share of the EU’s Common Agriculture Policy until 2020.
In Mrs May’s Florence speech in September, she promised to continue with the EU’s current long-term budget plan.
However, the Brussels bigwigs rejected this offer where officials demanded that Mrs May should commit to continue the budget obligations not paid out in the multi-annual budget and Britain’s share of pension obligations.
The Prime Minister needs to persuade the EU leaders that “sufficient progress” has been made so the two sides can begin to talk about trade.
Rees-Mogg: UK can leave Brussels 'insolvent' by rejecting bill
The European Council President, Donald Tusk, warned Britain at the leaders’ summit that “much more progress” was needed on the bill with adjustment to be made “at the beginning of December at the latest”.
Zsolt Darvas, a senior fellow at the Bruegel foundation and a leading EU budget specialist, said: “I can see no legal argument why the UK should not receive a rebate for 2018, when it was full EU member”.