George Osborne took a victory lap on Friday to declare that ‘instead of footing the bill, we have halved the bill.’ This would be the £1.7 billion EU budget invoice the European Commission handed to the UK government in October, with a pay-by date of 1 December. After meeting with his EU counterparts today, the UK finance minister announced a deal in which ‘the bill instead of being £1.7 billion will be around £850 million’.
Er…not quite, as it turns out. Here’s what Osborne left out: the UK will still owe the full £1.7 billion, only not all in December, and would be able to quickly offset part of the cost with its usual rebate on EU contributions. EU Commission vice president Kristalina Georgieva explained at a press conference later on Friday that the EU plans to amend its budget rules to allow for flexibility in ‘exceptional years’, when gross income exceeds previous estimates as the UK’s did this budget year.
For the UK, Georgieva said, this means the payment period for the £1.7 billion sum
‘will be stretched into the next year, and when this happens, then the payment and the rebate on the payment could converge.’
The deal is due to be finalised later this month or next. On the phone from Brussels, a commission aide told me that Osborne will
‘pay first and then get the rebate.’
This implies that Osborne will, despite his protestations, pay the full £1.7 billion – albeit with a chunky refund to follow shortly, which Britain was always going to receive.
So the question remains, where did Osborne get his claim of ‘halving’ the bill?