EU Demand For Backdated GDP Bill

Question

In 2014 the EU demanded an extra £1.7bn from the UK in a backdated GDP bill because prostitution and illegal drugs were seen as contributing to the British economy. This would add about a fifth to the UK's annual net contribution of £8.6bn. Has this bill been paid or is it going to be paid?

Answer 1

This question was (in part) asked during PMQs today, 8 June 2016:

Karl MᶜCartney (Lincoln) (Con)

Q10. The European Union recently admitted that it now has a black hole in its finances of €24.7 billion—about £19 billion. Eighteen months ago my right hon. Friend declared that he would not pay the EU a £1.7 billion surcharge—effectively a fine on British taxpayers for growing our economy—yet he was later forced to pay up. What reassurance can he give the House that hard-working British taxpayers will not be forced to pour money into that EU black hole if our nation votes to remain in the European Union? Does he, like me, accept that our only option to halt such payments is for our constituents to vote to leave the EU on 23 June? [905142]

The Prime Minister:

The reassurance that I can give my hon. Friend is that we fixed the European budget for a seven-year period between 2014 and 2020, and we fixed a total for that budget that was lower than for the previous seven-year period, which means that European budgets are going to go down, not up. That cannot be changed. This is a very important point. That overall ceiling of spending is determined by all 28 Prime Ministers and Presidents. There is a veto over changing it, just as there is a veto over the British rebate. The only person who can give up the British rebate is the British Prime Minister, and as long as I am Prime Minister there is absolutely no prospect of that happening. As my hon. Friend ended his question with a remark, I will end my answer with a remark: there is no expert saying that we would make a saving from leaving the EU. The only black hole would be in our public finances, because we would have a smaller economy and lower tax receipts, so we would either have to cut spending or put up taxes to make up for that fact. Source

Later, a fact-checking site commented:

Mr Cameron is correct on the existence of these two vetoes: one on the overall size of the EU budget, and the other on the UK’s budget rebate (discount).

The amount that the EU is allowed to spend over seven years is set by a unanimous vote of member countries. Budgets for any one year within the seven-year cycle have to stay within these limits.

Although the limits are due to be reviewed by the end of 2016, when a proposal for changing them can be tabled, this too would have to be agreed by all countries.

No country can be forced to find more money to finance unpaid spending commitments from the previous seven-year cycle; that will have to come from the 2014-2020 pot.

The UK has benefitted from a rebate on its EU budget payments since 1984. This discount can’t be changed in future without the UK’s agreement.

That’s because the rebate is contained in an EU law that has to be passed by all member countries, which again gives the UK a veto over it.

Other countries may push for the UK to give up some or all of the rebate in exchange for other favours. This happened in 2005, for example. Source