George Osborne accused of "spin" and "smoke and mirrors" after claims of halving £1.7bn EU bill

Lynsey Barber
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The UK has negotiated a payment plan to settle its EU bill (Source: Getty)

George Osborne heralded successful negotiations to halve the £1.7bn bill demanded by the European Union as a “result for Britain” yesterday, however his claims have been criticised as “spin” and “smoke and mirrors” by rival political parties.

The EU had set a deadline of 1 December for the UK to pay up. This has now been extended for all countries to 1 September 2016 and will be settled in instalments in July and September. The extension means a rebate due to the UK from the EU of around €1bn (£784m) next year will offset the £1.7bn figure, reducing it to around £850m.

Osborne said: “Today I can say this: instead of footing the bill, we have halved the bill, we have delayed the bill, we will pay no interest on the bill. And if there are mistakes in the bill we will get our money back.”

Labour shadow chancellor Ed Balls accused Osborne of taking the “British people for fools”. He said: “By counting the rebate Britain was due anyway they are desperately trying to claim that the backdated bill for £1.7 billion has somehow been halved. But nobody will fall for this smoke and mirrors. The rebate was never in doubt and in fact was confirmed by the EU Budget Commissioner last month.”

The EU’s new budget commissioner Kristalina Georgieva who lead the meeting of EU finance ministers yesterday, said: “As we all know, the UK receives a rebate on their contribution. In this exceptional circumstance, the payment and the rebate on the payment could converge. In a normal year, they would not.”

The billion pound bill follows recalculations of contributions based on a countries gross national income (GNI). The amount due from the UK as well as Italy, Greece and Cyprus, is larger than expected following the revisions.

Due to the “unusually large” correction which the government labeled unacceptable, the countries affected have been allowed to pay over a longer period of time. This means the payments and a rebate due to the UK fall in the same year.

Both installments are due after next year's general election.

Ukip leader Nigel Farage on Twitter accused Osborne of “trying to spin his way out of disaster”.

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