<TABLE cellSpacing=0 cellPadding=0 width=629 border=0><TBODY><TR><TD colSpan=3>UK gets £630m off EU contribution

</TD></TR><TR><TD vAlign=top width=416><!-- S BO --><!-- S IIMA --><TABLE cellSpacing=0 cellPadding=0 width=203 align=right border=0><TBODY><TR><TD> The budget continues to be a controversial EU issue

</TD></TR></TBODY></TABLE><!-- E IIMA -->The UK's contribution to the EU budget is being cut by £630m thanks to revised economic calculations in Brussels.

The news came as Britain continued to increase the pressure on the commission to cut the overall budget whilst safeguarding the UK's rebate.

A UK spokesman branded the commission's budget proposals as "grossly over-inflated" and "self-indulgent".

The savings this year will affect 20 out of 25 EU member states but the UK's reduction is by far the biggest.

The recalculation is based on issues like growth, inflation, trade and exchange rates.

Benefiting members?

The amended budget for 2005 includes savings of about £1.9bn on a proposed total of £70bn.

The Germans and Poles are being given back £225m, £110m for Spain and about £40m for Ireland.

Budget Commissioner Dalia Grybauskaite said: "This will benefit member states which will have added resources for national budgets."

Along with Germany, France, Austria, Sweden and the Netherlands, the UK wants the annual budget pegged at no more than 1% of member states' incomes.

But the Commission wants to have 1.24% of combined gross domestic product to meet the higher costs of an enlarged EU.

'Way too high'

A compromise of 1.094% has been mooted but the UK says that is still unacceptable.

"The six countries still say that is way too high," said one UK official.

In fact an increase from the current .98% to 1.24% of GDPs would raise the EU budget from £70bn to around £87bn.

Chancellor Gordon Brown says keeping to 1% would still allow a margin for annual increases in the EU budget that exceeded the growth rates of most national budgets and that would allow enough cash to pick up additional enlargement costs.

The row over Britain's EU rebate, secured by Margaret Thatcher in 1984, still rumbles on with the UK insisting it remains justified. "Even with the rebate, Britain gets by far the lowest share of the receipts from the budget of any of the member states, bar none. "And remember that the rebate is all about £3bn a year - compared with the overall budget of £70bn a year."<!-- E BO -->


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http://news.bbc.co.uk/1/hi/uk_politics/4614217.stm