Argument: The rebate could never be regained

Margaret Thatcher fought for four years to win the rebate for Britain, famously wielding her handbag at EU summits until it was agreed. Giving it up is a clear betrayal of Thatcher’s legacy and shows the present government’s unwillingness to stand up for Britain’s interests in Brussels. With the situation now different due to there being more members there is no chance of any future British Prime Minister being able to repeat Mrs Thatcher’s achievement of 1984, so once the rebate is given up, it can never be regained.

Candidate 1: "Giving up the rebate would mean better relations with the Europe Union

It is worth giving up the rebate to remove a constant source of tension and ill-feeling between Britain and its European partners. Until the rebate is abandoned, Britain will never be at the heart of Europe. This limits our ability to promote our other interests in Europe, as every argument always ends up back at the rebate, and weakens our moral authority. Denmark for example is similarly Euro sceptic but is fiercely opposed to the UK rebate and aims to scrap it during Denmark’s next EU Presidency in 2012. [1] Because preserving the rebate has always been the Prime Minister’s priority, every other British goal has been given up instead. This led to bad deals for Britain over the ERM, at Maastricht, and in 2002 when Tony Blair accepted a Franco-German agreement to leave the CAP unreformed until 2013. This is because Britain is inevitably on its own in any possible change to the rebate whereas on almost any other issue Britain has allies. So when Britain’s opponents can link the rebate to an issue Britain may be able to keep the rebate but will in other respects be on the losing side. [2]

[1] Jensen, Arne Nis, ‘The UK rebate – or rethinking the EU budget?’, 2011, p.27

[2] Rennie, David, and Helm, Toby, ‘Blair is all alone in Britain’s EU rebate row’, 2005"
Candidate 2: "With the expansion of the European Union it is no longer justified that Britain should not be paying more towards the European Union, and in particular the much poorer Eastern European states which have joined. Britain cannot expect to get as much back from the European Union as it puts in. Britain should accept being one of the biggest contributors and in return would get a bigger influence one the EU, rather than being constantly frozen out of decisions by France and Germany."
Candidate 3: "The Rebate is not justified

The British rebate is an undeserved anomaly - no other country has a similar arrangement to pay back part of its contribution to the EU budget. Germany, the Netherlands, Denmark and Sweden all make a bigger net contribution to the EU than Britain does (in proportion to the size of their populations), [1] yet they do get special treatment. Britain knew how the EU operated when it chose to join more than thirty years ago - if it didn’t like the structure of the budget, whereby rich countries pay more than poor ones, it could have stayed outside. In any case, a few billion Euros a year is a small sum to pay for access to a huge continent-wide market, the department for Business Innovation &amp; Skills estimated that GDP in 2006 was 2.2% higher than it would have been without a single market, [2] in Britain this would be almost $50billion.

[1] BBC News, ‘EU Budget’, 2007

[2] BIS, ‘The Benefits and Achievements of EU Single Market’"
Candidate 4: "When the rebate was agreed over twenty years ago, Britain was poor after decades of decline. In fact it was the third poorest state in the then European Economic Community (after Ireland and Greece) [1] , so the size of its net contribution to the budget was clearly unfair. Now the UK is one of the EU member countries and the rebate is no longer justifiable in the way it was originally justified. The sums involved are small compared to the overall UK budget - much less than the margin of error in the Chancellor of the Exchequer’s tax and spending plans, in 2003 for example Gordon Brown had to borrow £10 billion more than expected. [2] It is partly (perhaps largely) because of Margaret Thatcher’s achievements in power that the UK is so strong economically, so agreeing that the rebate is no longer necessary is a tribute to her legacy, not a betrayal.

[1] OECD, ‘1984, Gross domestic product: Per head, US $, constant prices, constant PPPs, OECD base year’, 2011

[2] Schifferes, Steve, ‘Chancellor to squeeze wages’, 2003"
Candidate 5: "The rebate should go in exchange for CAP reform

It is worth giving the rebate up in exchange for serious reform of the EU budget, particularly of the Common Agricultural Policy which spends 40% of the EU’s budget [1] on 3% of its population. [2] The CAP not only wastes taxpayers’ money, it also raises the cost of food for European consumers, ruins the environment and prevents poor farmers in the developing world from trading their way out of poverty. Even in its own terms it is a disaster, for most CAP money goes to a small number of rich landowners running huge agribusiness estates, not to small-scale peasant farmers preserving the traditional rural way of life. If offering to give up the British rebate helps to get agreement on reform, then it is a sacrifice well worth making. Britain on the other hand favors using CAP more to protect the environment rather than encourage food production. [3]

[1] Europa, ‘Budget 2011 in figures’, 2011

[2] Eurobarometer, ‘Europeans, Agriculture and the Common Agricultural Policy’, 2007, p.9

[3] Environment, Food and Rural Affairs Committee, ‘The Common Agricultural Policy after 2013’, 2011"
Candidate 6: "New member states are much poorer than the UK

Britain should give up the rebate in solidarity with the new member states. Most of the ten recent entrants to the EU are still struggling to overcome the legacy of communist rule and are much poorer than the previous 15 member states. In 2009 Bulgaria and Romania had less than half the average EU GDP per capita whereas the UK was about 120% EU average. [1] As one of the richest EU members, Britain has a moral responsibility to contribute its share of the money needed to allow the new member states to make a success of EU membership. It also has a self-interest in contributing to their economic development, for as they become richer their citizens will increasingly buy the services and media exports in which Britain specialises. Indeed, because the rebate is paid for by all member states the new member states will be contributing payments towards Britain’s rebate - clearly something which Britain cannot attempt to defend given the disparity in wealth.

[1] Eurostat, ‘European economic statistics’, 2010, p.31"
Candidate 7: "Enlargement could mean a new start

Britain should not alienate its natural allies among the new member states by insisting on the rebate. Like Britain, the new member states are largely economically liberal, anti-federalist regarding the future of the EU, and are pro-American in terms of foreign policy. As a result Britain is much more likely to be able to work with Poland, Czech Republic and Hungary on these issues. [1] They also recognise that Britain promoted the cause of their membership throughout the 1990s and appreciate its willingness to grant immediate free movement to their citizens who wish to work in Britain. In all these ways they are closer to Britain than to France or Germany, the two big states who have traditionally dominated EU decision-making. Enlargement presents Britain with a great opportunity to influence the future direction of Europe in partnership with these new states, but this opportunity will be lost if British insists on the rebate regardless of Central and Eastern European opinion.

[1] Number 10, ‘Transcript of press conference given by the Prime Minister David Cameron at the EU Summit in Brussels on 17 December 2010’, 2010"
Candidate 8: "The rebate is bad for Britain and the EU as it leads to a complacency in the UK about the way the EU is run. Knowing that two-thirds of Britain’s net contribution will be returned anyway, British politicians and civil servants have not had to be serious about tackling waste and corruption at Brussels. Giving the rebate up would focus British minds much more clearly upon how the EU operates and would lead them to demand higher standards, both of the Commission and of their own elected representatives in the Council of Ministers and the European Parliament."
Candidate 9: "There may be bigger problems but the rebate is symptomatic of many of them. The reason for many of Europe’s problems is the determination for member states to take from the EU but not give and to haggle over everything rather than working together. The rebate is a prime example of one state believing that it deserves a small amount of money more than others and as such should be scrapped in order to help show that both big and small problems can be tackled through one state being willing to give up something important to it in return for others doing the same on other issues."

When the rebate was agreed over twenty years ago, Britain was poor after decades of decline. In fact it was the third poorest state in the then European Economic Community (after Ireland and Greece) [1] , so the size of its net contribution to the budget was clearly unfair. Now the UK is one of the EU member countries and the rebate is no longer justifiable in the way it was originally justified. The sums involved are small compared to the overall UK budget - much less than the margin of error in the Chancellor of the Exchequer’s tax and spending plans, in 2003 for example Gordon Brown had to borrow £10 billion more than expected. [2] It is partly (perhaps largely) because of Margaret Thatcher’s achievements in power that the UK is so strong economically, so agreeing that the rebate is no longer necessary is a tribute to her legacy, not a betrayal.

[1] OECD, ‘1984, Gross domestic product: Per head, US $, constant prices, constant PPPs, OECD base year’, 2011

[2] Schifferes, Steve, ‘Chancellor to squeeze wages’, 2003
