Christmas comes early for UKIP

[Saracen]

Nigel Farage appears utterly delighted with the EU commission's Christmas present to him .... dropping a £1.7bn bill on the UK.

BBC link

David Cameron, of course, is not so delighted, this appearing a few weeks before a highly contentious by-election (Rochester and Stroud) after ex-Tory MP Mark Reckless defected to UKIP and resigned his seat, forcing a by-election. And a by-election, by the way, Farage is now saying he is "confident" they will win.

The worry, for Cameron, is that if UKIP do win, it may trigger either more defections, or possibly even a leadership challenge (though I find that latter very unlikely 7 months before a general election).

But whatever happens, it's a gift for Farage, with no downside. And it'll be the gift that keeps on giving. Cameron can't win this one. If he pays, he hands UKIP a wonderful stick to beat him with, and if he refuses to pay, the on-going dispute with the EU and the resultant news coverage will hand Farage a wonderful anti-EU stick to beat him with.

Happy Christmas, Nigel.

[RobbieRoy]

It's a pity some of the detail has been drowned out by the media knee jerk. It's actually a routine budget adjustment, apparently, and needs to be agreed by the European countries anyway.

Our government will have been very well aware of it coming, but perhaps not the quantum involved - which is eyebrow raising to say the least. And it's not just the UK that's unhappy - just look at Italy and Holland!

[kalniel]

Yeah it's the way it's been presented and timing that's the issue - I'd say someone in the EU parliament wanted to stitch Cameron up.

[Saracen]

It's a pity some of the detail has been drowned out by the media knee jerk. It's actually a routine budget adjustment, apparently, and needs to be agreed by the European countries anyway.

Our government will have been very well aware of it coming, but perhaps not the quantum involved - which is eyebrow raising to say the least. And it's not just the UK that's unhappy - just look at Italy and Holland!

And Greece, even. Because they're not deep enough in financial s.... erm, trouble, already. Presumably, they'll yse some of the EU bailout funds to pay the £70m the EU wants back.

[cam1986]

£1.7b is very far from routine!!!!! lol

[Saracen]

Yeah it's the way it's been presented and timing that's the issue - I'd say someone in the EU parliament wanted to stitch Cameron up.

You might well think that. It either stinks, or is one hell of a coincidence.

But if I was being very cynical, I might suggest that the EU commission wants to maximuse UKIP votes, and minimise Tory ones, in the General Election, with the intent of killing off any chance of a Tory victory and the EU exit referendum we've been promised if they win.

[Saracen]

£1.7b is very far from routine!!!!! lol

Budget adjustments are routine. The statistical basis has changed, with UK agreement, and this represents about 20 years of accumulated underpayments, by that agreed new method.

What truly stinks is being given that size bill, and a Dec 1st due date.

[Gerrard]

I know it's over simplifying, but it would be interesting to see people's reaction to this and compare it their own "tax the rich" views within the country now that the shoe's on the other foot.

[jim]

Given that Germany are lined up for a whacking great rebate, I think that might be oversimplifying a touch.

It is interesting though. Cameron's stuck between a rock and a hard place, and this could be the biggest test he'll face in the entire time he's PM.

[Hoonigan]

I haven't followed this on the news at all, and quite frankly I'm struggling to understand it all.

Could someone please put this whole thing into "simple terms"?

[RobbieRoy]

I haven't followed this on the news at all, and quite frankly I'm struggling to understand it all.

Could someone please put this whole thing into "simple terms"?

As I understand it, its really that the EU has a budget process that works out how much each member state should contribute to the running of the EU. That's done on the basis of the relative wealth and prosperity of each country.

Relatively recently the EU countries, UK included, agreed that the basis year to be used for calculating their relative wealth and prosperity should be 1995.

Every now and again the timetable of the EU financial management system sets up a budget review to check what each country should be contributing by having a look again at the relative wealth and prosperity. This timetable is well known by each country and so the budget revision is not in itself an unexpected thing.

What's happened here is that a routine review has taken into account the black economy as well as the visible economy when assessing things and has taken the agreed 1995 base line as the start point.

It is on that basis that the amendments to charges have been calculated, and they inevitably involve an amount of retrospective amendment because of the use of the base line.

Hope that helps!

[wasabi]

What's happened here is that a routine review has taken into account the black economy as well as the visible economy when assessing things and has taken the agreed 1995 base line as the start point.

It is on that basis that the amendments to charges have been calculated, and they inevitably involve an amount of retrospective amendment because of the use of the base line.

Hope that helps!

All true. Yet basically underlines the socialist underpinnings of the big-government EU. Tax success, reward failure.

[cam1986]

Budget adjustments are routine. The statistical basis has changed, with UK agreement, and this represents about 20 years of accumulated underpayments, by that agreed new method.

What truly stinks is being given that size bill, and a Dec 1st due date.

Still, £1.7b is far from routine! Def not the norm and a total shock to the country!

[kalniel]

All true. Yet basically underlines the socialist underpinnings of the big-government EU. Tax success, reward failure.

Otherwise known as making the rich pay more than the poor - there is no success/failure measure in here.

[cptwhite_uk]

I don't understand why they're using 20 year old economic performance as a base line for calculating the money we contribute today - it seems completely bizarre. Surely the last fiscal year's figures would be a much better stick by which to gauge how much everyone contributes?

I must admit I was an idealistic pro-Euro supporter some 10 years ago, but has time as moved on I'm becoming more and more jaded to the reality of what we actually have. I still support the idea of some kind of union in principal, but the lack of financial auditing and remote democratic process completely disengaged with the populations of the member states is making me think we'd be better off out of the whole thing in its present form.

[kalniel]

I don't understand why they're using 20 year old economic performance as a base line for calculating the money we contribute today - it seems completely bizarre. Surely the last fiscal year's figures would be a much better stick by which to gauge how much everyone contributes?

The baseline is just that - the starting point that set the initial contribution. Changes since then are taken into account, hence the reviews, and the last fiscal years figures are what the final amounts are based on. This amount has been reduced for us in the past. This new demand is just a correction for the way the figures are calculated that makes sure the calculation is the same across Europe.