David Cameron: Britain will not pay extra £1.7bn for EU budget
Visibly furious Prime Minister hits out at 'surprise' £1.7billion EU bill and speaks of anger at 'appalling' way Britain has been treated by European Commission
David Cameron arrives for a press conference after the heads of state meeting at the EU council headquarters, in Brussels, Belgium Photo: JULIEN WARNAND/EPA
[Only registered and activated users can see links. ] has said Britain will refuse to pay a “completely unacceptable” bill of £1.7billion to the [Only registered and activated users can see links. ].
The Prime Minister hit out at the bill and spoke of his anger at the “appalling” way Britain has been treated by the European Commission.
He said that “it certainly doesn’t help” the chances of Britain remaining in the EU after an in-out referendum due to be held in 2017.
A visibly furious Mr Cameron said: “I'm not paying that bill on December 1. It is not going to happen.”
The UK was on Thursday [Only registered and activated users can see links. ] because Britain’s economy has performed better than other economies in Europe since 1995.
The surcharge - which would add almost a fifth to the UK's annual contribution of £8.6 billion - is intended to reflect Britain's better-than-expected economic performance relative to other EU states.
It results from an EU recalculation of national incomes dating back to 1995 and taking into account recent changes in the rules to include economic activities such as prostitution and illegal drugs.
Speaking in Brussels, Mr Cameron said: "This is completely unacceptable.
"It is an unacceptable way for this organisation to work - to suddenly present a bill like this for such a vast sum of money with so little time to pay it. And it is an unacceptable way to treat one of the biggest contributors to the European Union.
"It is an appalling way to behave. I am not paying that bill on December 1. If people think I am they have got another thing coming.
“This organisation shouldn't be surprised if it behaves in its way if its members say it has to change.”
Mr Cameron said that he found out about the bill on Thursday, but that Treasury officials were warned earlier this week.
He earlier interrupted a meeting of leaders at the European Council to tell José Manuel Barroso, the president of the European Commission, that he had "no idea" of the impact of the budget hike would have in Britain.
The Prime Minister said the issue would now be discussed at an emergency meeting of EU foreign ministers and Britain would challenge it "every way possible".
"The Prime Minister said to Barroso he had no idea of the impact that these things have - it's not just about public opinion, it's two billion euros," a Government source said.
"It is something we are seeking to challenge. It's rather a large amount of money. The first thing is to discover precisely what the basis for the increase is."
Prime Minister Renzi of Italy, which has also been hit by an invoice for increased payments, backed up Mr Cameron.
The Prime Minister held talks at the European Council summit in Brussels on Thursday night with Dutch counterpart Mark Rutte, who is facing a similar surcharge, on how they can challenge the demand for cash.
Preliminary figures seen by the Financial Times suggest that Britain is facing by far the biggest top-up, while the Netherlands is being asked for an extra €642 million (£506 million).
By contrast, Germany receives a rebate of €779 million (£614 million), France €1 billion (£788.7 million) and Poland €316 million (£249 million).
David Cameron with Francois Hollande and European Council President Herman van Rompuy, sitting, during the summit (Olivier Hoslet/EPA)
The demand was met with outrage by Eurosceptics.
John Redwood, the former Tory trade secretary, said Mr Cameron should refuse to pay - and should amend the law if necessary to make clear the UK regards the demand as "illegal and unacceptable".
Mr Redwood told the BBC Radio 4's Today programme: "This is a very large increase in tax on the British people, imposed retrospectively without their permission.
"It offends all our principles of natural justice and fair taxation. The British people are already paying too much tax and he last thing they intend to do is sent another £1.7 billion to the Commission so that they can behave in the way they just have overnight."
Patrick O'Flynn, a Ukip MEP, said: "The EU's budget surcharge is effectively asking UK taxpayers to fork out for the disaster of the Eurozone. Totally outrageous."
Mark Pritchard, a Conservative MP for The Wrekin, said: "The timing and content of the EU budget demand shows how inept Brussels is. Brussels needs to work with the UK Government, not work against it.
"Unless this behaviour changes, the EU referendum could be brought forward. Europe should not penalise the UK's economic success whilst rewarding France's economic failure."
The surcharge is due for payment on December 1 - just days after the Rochester and Strood vote on November 20.
Peter Bone, the Conservative MP for Wellingborough, said: "We are just being taken for a ride. We are paying more and more in and getting nothing in return.
"Roll on the referendum - this will just strengthen the resolve of the British public to get out of this superstate.
"They are trying to rub David Cameron's nose in the dirt for having the audacity to stand up and say freedom of movement is wrong."
David Cameron arrives at the start of the second day of the European head of states summit in Brussels (Stephanie Lecocq/EPA)
Labour and the Liberal Democrats also said the demand was unacceptable.
Ed Balls, the shadow chancellor, claimed the Prime Minister is likely to have known about the payment for "weeks".
He said: "It is unacceptable it’s just been sprung upon people in this way but I’ve got to say what has our Prime Minister been doing?
"I mean, how could he suddenly be surprised about this, surely the Treasury has known about this for weeks and weeks and weeks?"
Downing Street refused to be drawn on exactly when Mr Cameron learned of the demand for extra money, saying only that the commission had published the details in "recent days".
The Prime Minister's official spokesman said there now needed to be a political-level discussion by finance ministers "well ahead" of the due payment date on December 1.
"It is not acceptable to have a demand such as this seemingly presented as a technical adjustment. It requires detailed political discussion," the spokesman said.
Nigel Farage, the Ukip leader, said Britain would have no choice but to pay the money.
“Of course he will pay up," he said. "These are the rules, the contributions to the European Union was a very complex formula and part of it is a measurement of your GDP against everybody else’s. There’s nothing he can do."
Open Europe, the think tank, said it is open to Britain and Denmark to refuse to pay. However, this would likely result in legal action by the commission, fines and interest charges of 2.5 per cent a month.
Alternatively, Britain could seek for the sum to be deducted from future budget payments.
Mr Rutte said the bill was an "unpleasant surprise" and said his country would consider legal action.
The payment, described by officials as a “surcharge” follows a change to the way the EU calculates gross national income to include previous hidden service industries, including such prostitution and illegal drugs.
Britain, which has a large service sector, has had its national income revised upwards to reflect a higher pace of growth compared to other countries.
There is already a scheduled meeting of European finance ministers on Novermber 7. Brussels officials said that it would be "highly unlikely" to organise an emergency meeting, but the agenda of that meeting could be changed.
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