BRITAIN'S Chancellor Gordon Brown was not consulted about the controversial European Union budget deal brokered by Prime Minister Tony Blair at the weekend, threatening a rift between the pair. Mr Blair clinched a last-minute agreement with the 25 EU leaders for a tighter 2007-2013 spending package but with Britain agreeing to give up more of its multi-billion-euro rebate. The British Treasury is said to be "quietly fuming" about the deal agreed by Mr Blair, which will see Britain paying 60per cent more to the European budget and the British rebate cut by pound stg. 1billion ($2.4billion) a year for seven years, in return for a mere review of farm subsidies. Although praised abroad, Mr Blair was vilified at home for "surrendering" the rebate, which former prime minister Margaret Thatcher negotiated in 1984 to compensate for receiving less EU money in farm subsidies. MPs claimed that Mr Blair, who will have left Downing Street by the time the expanded EU budget comes into force, has handed Mr Brown, his heir apparent, a "poisoned chalice" because it could mean having to cut his spending plans for schools and hospitals.
Mr Blair clinched a last-minute agreement with the 25 EU leaders for a tighter 2007-2013 spending package but with Britain agreeing to give up more of its multi-billion-euro rebate.
The British Treasury is said to be "quietly fuming" about the deal agreed by Mr Blair, which will see Britain paying 60per cent more to the European budget and the British rebate cut by pound stg. 1billion ($2.4billion) a year for seven years, in return for a mere review of farm subsidies.
Although praised abroad, Mr Blair was vilified at home for "surrendering" the rebate, which former prime minister Margaret Thatcher negotiated in 1984 to compensate for receiving less EU money in farm subsidies.
MPs claimed that Mr Blair, who will have left Downing Street by the time the expanded EU budget comes into force, has handed Mr Brown, his heir apparent, a "poisoned chalice" because it could mean having to cut his spending plans for schools and hospitals.
Reports that Chancellor Gordon Brown is unhappy with the EU budget deal struck by Tony Blair have been dismissed by a Downing Street spokesman. Some Sunday newspapers said Mr Brown was unhappy the deal would cost the UK an extra £1bn a year and that he had not taken part in final negotiations. The spokesman said the Treasury had worked closely with No 10 on the deal. ... Tory MP Bill Cash told the Sunday Times newspaper: "Tony Blair has handed Gordon Brown a poisoned chalice with this deal. "He will have to find an extra £1bn a year, money that could have gone on hospitals and schools. "This will spell real trouble for Brown and I can see why he would be angry." But the Downing Street spokesman said: "We negotiated as a government. "Officials from the Foreign Office, Treasury and No 10 worked closely together under the prime minister and foreign secretary before and during the two days of the European Council to get this good deal."
Some Sunday newspapers said Mr Brown was unhappy the deal would cost the UK an extra £1bn a year and that he had not taken part in final negotiations. The spokesman said the Treasury had worked closely with No 10 on the deal.
... Tory MP Bill Cash told the Sunday Times newspaper: "Tony Blair has handed Gordon Brown a poisoned chalice with this deal.
"He will have to find an extra £1bn a year, money that could have gone on hospitals and schools.
"This will spell real trouble for Brown and I can see why he would be angry."
But the Downing Street spokesman said: "We negotiated as a government.
"Officials from the Foreign Office, Treasury and No 10 worked closely together under the prime minister and foreign secretary before and during the two days of the European Council to get this good deal."
Tony Blair's sacrifice over Britain's European Union rebate has left his Chancellor to plug a multi-billion pound hole in this country's future spending plans, it emerged last night. Gordon Brown will have to find between £1bn and £2bn a year that would otherwise have been available to spend between 2008-11, a key period for investment in health, education and frontline services before the next election. Treasury sources last night played down suggestions that Brown was angry about the move or had been not been told what was happening. Although Blair did not consult his Chancellor directly before tabling a more generous offer on Friday afternoon, which finally clinched a deal on the EU budget, a senior Treasury official was with the Prime Minister in Brussels. However officials confirmed the 'spending envelope' for the next review of government spending, which is already so tight that it is causing tensions across Whitehall, would be affected by the loss of over £7bn from Britain's future rebate.
Gordon Brown will have to find between £1bn and £2bn a year that would otherwise have been available to spend between 2008-11, a key period for investment in health, education and frontline services before the next election.
Treasury sources last night played down suggestions that Brown was angry about the move or had been not been told what was happening. Although Blair did not consult his Chancellor directly before tabling a more generous offer on Friday afternoon, which finally clinched a deal on the EU budget, a senior Treasury official was with the Prime Minister in Brussels.
However officials confirmed the 'spending envelope' for the next review of government spending, which is already so tight that it is causing tensions across Whitehall, would be affected by the loss of over £7bn from Britain's future rebate.
Blair to face backlash over EU rebate deal [Note the paper version title of this article: "Blair's £7bn concession on rebate far bigger than it seems"] Mr Blair's concession regarding Britain's EU budget rebate appears to be far bigger than Downing Street has publicly admitted. At last Friday's EU summit in Brussels, the prime minister agreed to slash the cash the UK receives from the rebate by £7bn over the seven years from 2007 to 2013. Downing St has therefore argued that the cost to the British taxpayer of the decision will be about £1bn a year. But analysis of detail of the agreement published at the weekend shows that the UK's rebate will in fact remain untouched in 2007 and 2008. Instead, the £7bn cash loss suffered by the UK is to be compressed into the years between 2009 and 2013. An analysis by the FT suggests the UK treasury will forego about £500m in 2009, rising to £1.5bn in 2010, and £2bn in each of the subsequent years from 2011 to 2013. That is likely to create two problems for the UK treasury. First, the full impact of the cash shortfall is now likely to be concentrated on the period covered by Gordon Brown's next spending review, spanning 2008-2009 to 2010-2011.
[Note the paper version title of this article: "Blair's £7bn concession on rebate far bigger than it seems"]
Mr Blair's concession regarding Britain's EU budget rebate appears to be far bigger than Downing Street has publicly admitted.
At last Friday's EU summit in Brussels, the prime minister agreed to slash the cash the UK receives from the rebate by £7bn over the seven years from 2007 to 2013. Downing St has therefore argued that the cost to the British taxpayer of the decision will be about £1bn a year.
But analysis of detail of the agreement published at the weekend shows that the UK's rebate will in fact remain untouched in 2007 and 2008. Instead, the £7bn cash loss suffered by the UK is to be compressed into the years between 2009 and 2013.
An analysis by the FT suggests the UK treasury will forego about £500m in 2009, rising to £1.5bn in 2010, and £2bn in each of the subsequent years from 2011 to 2013.
That is likely to create two problems for the UK treasury. First, the full impact of the cash shortfall is now likely to be concentrated on the period covered by Gordon Brown's next spending review, spanning 2008-2009 to 2010-2011.
No wonder Brown is unhappy at Blair - the rebate "pain" is all due later, when Blair won't be around anymore... In the long run, we're all dead. John Maynard Keynes
· PM claims victory in face of widespread criticism · Pro- and anti-EU MPs line up to attack deal Britain's EU budget rebate will increase under the compromise hammered out at the Brussels summit, Tony Blair will tell MPs today. The average annual rebate in the six-year budget cycle just ending was £3.6bn, and because of the way it is calculated, would have risen to an average £5.3bn a year in the new cycle, he will tell the Commons. Despite offering £1bn a year on that rebate to help modernise the new eastern European states, the prime minister will argue that not only has he retained the rebate but it will increase to around £4.3bn annually up to 2013. In a major shift of budget cash from the rich west to the EU's poor east, Britain's net contributions will rise significantly, though by half as much as Italy and France, which will at last be paying roughly the same share of national income to the EU as Britain. But the principle of the rebate has been retained, along with 80% of its value - the very point his critics accuse Mr Blair of betraying. Faced with accusations of betrayal and incompetence, Mr Blair will round on Tory critics and say they led the campaign in the 90s to admit the impoverished ex-Soviet bloc states, and should accept the need to provide them with financial help.
Britain's EU budget rebate will increase under the compromise hammered out at the Brussels summit, Tony Blair will tell MPs today. The average annual rebate in the six-year budget cycle just ending was £3.6bn, and because of the way it is calculated, would have risen to an average £5.3bn a year in the new cycle, he will tell the Commons.
Despite offering £1bn a year on that rebate to help modernise the new eastern European states, the prime minister will argue that not only has he retained the rebate but it will increase to around £4.3bn annually up to 2013.
In a major shift of budget cash from the rich west to the EU's poor east, Britain's net contributions will rise significantly, though by half as much as Italy and France, which will at last be paying roughly the same share of national income to the EU as Britain. But the principle of the rebate has been retained, along with 80% of its value - the very point his critics accuse Mr Blair of betraying.
Faced with accusations of betrayal and incompetence, Mr Blair will round on Tory critics and say they led the campaign in the 90s to admit the impoverished ex-Soviet bloc states, and should accept the need to provide them with financial help.
