Cameron: tell the truth to the people

Cameron: tell the truth to the people

by Bill Jamieson
article from Friday 7, November, 2014

“It’s completely unacceptable… It's an appalling way to behave”. 

THUS Prime Minister David Cameron at a press conference in Brussels on October 24 when, thumping the lectern, he rejected the European Commission’s demand for an additional £1.7 billion contribution from the UK, payable by December 1.

Lest there was any doubt about his words, or the meaning of his words, he added, “I’m not paying that bill on December 1. If people think I am, they’ve got another thing coming. It’s not going to happen.”

Far from the Commission bowing before this onslaught and offering a compromise, it insisted that the amount had to be paid by the stated date.  “All these corrections have to be reimbursed by December 1,” said a commission spokesman. “Everybody has to pay what is due.”

It also revealed that the UK government would be faced with fines if it failed to pay on time. Britain would be hit with fines of close to £70 million a month next year, with Commission officials threatening to charge Britain an annual interest rate of 52 per cent if the bill is not paid by the 1st of December. If not paid within the first year, the average interest charged could rise to nearly £250,000 per day over the course of the year.

If anything was more likely to stiffen the UK government’s resolve, it would surely have been the threat of interest charges which, as Tory MP Dominic Raab, put it, would make “the most predatory payday loan shark blush”.

But now there are whispers of a Cameron climb-down in the air. According to a report in The Times there are whispers in Italy – the current holders of Council Presidency – that a deal may be struck on or before Friday's meeting of finance ministers. 

What looks likely – or so such reports have it – is that the government will be allowed to make the £1.7 billion in instalments without incurring a crippling rate of interest.

So the Prime Minister’s defiance, it seems, is not over the £1.7 billion amount – but being told it had to be paid on December 1.  

That’s a long way short of the impression he created barely two weeks ago. This  extra demand – the peremptory way in which it has been presented and now the threat of penal fines on failure to comply – gives the impression, less of a defiant Euro-sceptic Prime Minister than a European Commission keen to accelerate a UK exit. 

Not only has it  angered voters who have been asked by their chancellor to prepare for two further years of austerity, but it also adds further to doubts on whether David Cameron will be able to achieve any re-negotiation of significance on this and on immigration controls.  This week the German Chancellor Angela Merkel, thought to be sympathetic to the UK government’s concerns over the scale of immigration from the EU, firmly ruled out any deal that would compromise freedom of movement.  

Thus, far from the referendum pledge being an election winner for the Conservatives next May, it now faces another crushing by-election defeat at the hands of UKIP in the Rochester and Strood by-election on November 20. 

 A month ago senior party officials had been hoping it could hold the seat and halt the UKIP bandwagon. Now the EU’s £1.7 billion demand – and the possibility of a UK pay-up despite David Cameron’s rhetoric of defiance – will add further to public scepticism over “re-negotiation” – and indeed the crazy finances of the EU. 

The extra £1.7 billion demand follows a revision of the value of Britain’s wealth as measured by gross national income (GNI) over the period 1995 to 2013. Under the EU’s revision, France will receive cash back worth £790 million because its economy has performed poorly while the UK has recovered, Germany will get a rebate and Greece – flattened by the Euro-zone crisis and years of austerity – will have to pay more. It is as near to the economics of Bedlam as anyone can imagine. 

And the extra  £1.7 billion understates the huge increases in Britain’s contributions to the EU in recent years. The net figures – which take into account the UK’s rebate – show the UK’s contribution to the EU was £2.7bn in 2008, rising to £3.8bn in 2009, £7.2bn in 2010, £7.5bn in 2011, £8.5bn in 2012 and £11.3bn in 2013. 

The Treasury had predicted that Britain would pay up more like £8.6bn last year but it hugely underestimated the actual contributions. So much for a firm grip on the nation’s finances.

The cost to UK taxpayers of EU membership now seems to be totally outwith the control of the UK government. In the words of Matthew Elliott, chief executive of the Business for Britain campaign group, “We cannot continue to write bigger and bigger cheques to remain a member of an unreformed and uncompetitive European Union. Business is struggling under mounds of EU red tape and the UK economy is threatened by yet another potential Euro zone recession.”

And there is no sign of improvement any time soon. Indeed, evidence of the Eurozone’s dismal performance continues to mount.   According to the European Commission this week, the economy of the 18-country single currency area will grow by just 0.8 per cent this year, well below its 1.2 per cent estimate made earlier this year. The commission has also has cut its growth forecast for 2015 to 1.1 per cent from 1.7 per cent, and says the Eurozone will not now reach a growth rate of 1.7 per cent until 2016. A further improvement by the UK would risk triggering demands for even higher contributions.

The least a UK prime minister should do is to be straight with the people of this country. If this is the non-negotiable rise in our cost of membership, he should have the guts to admit it. Rhetoric to the contrary only fuels anger at the dishonest way we are being governed – and the rapacious scam that the failing EU has become. 

 

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