Question to the HM Treasury:

To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 15 December 2014 (HL3255), why the repayment conditions were not agreed in advance of the European Commission announcing the additional contribution to the European Union Budget; and what contingency planning they had undertaken to prepare for such an additional repayment demand.

In line with the Own Resources system – which underpins Member State contributions to the EU budget – adjustments are made to Member State contributions towards the end of each year, as a result of statistical revisions to factors underlying the contributions.

As the Prime Minister said in his statement following the October European Council last year, in some years the UK adjustment has been negative and in some years we contribute a little bit more. This happens every year. However, what has never happened is for €2 billion to be demanded.

The Prime Minister also made clear that it was an unacceptable way for the Commission to suddenly present a bill like this for such a vast sum of money and with so little time to pay it.

Commission Vice-President Georgieva confirmed that there was no way that Member States could have known the net figure until 17 October 2014.

Following intensive discussions with the Commission and at the November ECOFIN meeting, the Government halved the bill for the UK, delayed the bill, will pay no interest on the bill, and has changed the rules of the European Union so that such unacceptable behavior never happens again.