Britain's EU rebate 'must be re-examined'

Britain’s rebate from the European Union must be re-examined in the light of enlargement, Budget Commissioner Michaele Schreyer said today.

Chancellor Gordon Brown yesterday insisted the cash-back agreement should not be affected by the introduction of 10 new members.

The UK receives a rebate under a deal struck by former Tory Prime Minister Margaret Thatcher, to off-set low farm grants and subsidies.

However, Ms Schreyer stressed the agreement was made “a lot of years ago” and said it was time to ensure all members were fairly treated.

A “generalised correction mechanism” was needed, the Commissioner told BBC Radio 4’s Today programme.

“Of course we know how sensitive this is for the United Kingdom and we know, of course, that any change can only be done by unanimous vote in the European Council,” she said.

However, she added: “Of course, we should have the rule that there is no unfair treatment between the net contributors.”

Ms Schreyer said the Commission had not yet produced any figures on what could happen to the rebate.

“First we have to see how the Council takes this idea of a generalised correction mechanism,” she said.

Shadow chancellor Oliver Letwin backed Mr Brown’s opposition to any change to the rebate.

“We started it. They have kept it. It should be kept,” Mr Letwin said.

He also backed the chancellor’s opposition to proposals for a 25% rise in the EU budget.