Expert Comment: Britain and the EU Budget RowTuesday 28 October 2014
There is a play by the great Italian Marxist playwright called “Can’t Pay? Won’t Pay!” – a farce about protests against ever-rising prices. At present, David Cameron seems to be performing his own farce called “Can Pay, Won’t Pay” in the current row over the amount the UK has to pay the European Union.
Every member-state of the EU pays a ‘membership fee’. This is calculated on the basis of GNI, or Gross National Income, which is essentially a measure of the total income in a country. This means that bigger countries pay a bigger share, although everyone pays a proportional contribution. The UK has just been presented with a bill for an additional €2.1 billion (around £1.7 billion). How has this happened? Basically, because Britain’s GNI has gone up. This is due to two reasons. First of all, after a number of years of recession, the UK economy has begun to grow slightly.
Secondly, the UK’s Office of National Statistics has adjusted how it measures GNI to give a more accurate picture. So the increased membership fee was entirely predictable and indeed was signalled many months ago. So why is there the big row at the moment? It seems to be yet another example of a recurrent problem in Britain’s relations with the European Union – the UK has never learnt how to play the Brussels game and has consistently failed to adapt to a different form of politics.
The EU works on the basis of compromise. It avoids winner-takes-all situations, and instead involves a lot of negotiations and horse-trading. To play this game well, it is important to make friends and allies easily, to be able to adapt to subtly shifting alliances, to be prepared to back down at times, and above all to avoid being too confrontational. Successive UK governments do not have a very good record in this light.
Admittedly, the budget row is a little different, but in a way that was expressly intended to make it less open to dispute, not more so. Realising that who pays what would be a very hot political potato, the EU’s member-states decided long ago to take the politics out of setting budget allocations by agreeing a formula which would be applied by independent experts. And that is exactly what has happened in this case.
However, it has come at a very awkward time for the Conservative Party, under fire from a UKIP that does not have to concern itself at all with the responsibility of EU negotiations and which can simply play to the public gallery. Even so, the government’s handling of the situation has been poor, as its belligerent reaction has alienated potential allies and partners.
It also risks losing money. If the UK tries to avoid paying the additional fee, then the whole question of the British rebate will be back on the table – this is an agreement (reached through negotiation and horse-trading in the typical EU way) to adjust the amount Britain has to pay by returning some of the money. The other EU member-states have never been very happy with this arrangement, but have put up with it as a necessary compromise. But if Britain continues to isolate itself, it will be much harder to protect its interest in this area.
Dr Michael Holmes in Senior Lecturer in British Politics. View his full profile