Call to 'come clean' on EU payments
The Government has been urged to "come clean" about its handling of European Union budget negotiations amid allegations George Osborne struck a secret deal over the UK's contributions to Brussels.
Despite previously opposing proposals to boost the EU's contingency fund for this year, Britain abstained in a vote that would have handed an extra £2.4 billion to the European Commission, the Sunday Times reported.
The move led to claims - strenuously denied by the Treasury - that the UK agreed not to oppose the move as part of the effort to reduce the surprise £1.7 billion surcharge demanded from the UK by Brussels last month.
Following talks between the EU finance ministers on Friday, Treasury Financial Secretary David Gauke abstained even though other countries opposed to higher spending - including Germany, France, Netherlands, Sweden, Denmark, Austria and Finland - voted against the plans, the newspaper reported.
The proposals were rejected but the commission intends to return with new ones, and if passed British taxpayers would be liable for a £400 million share of the £2.4 billion.
The Sunday Times said one foreign diplomat claimed the abstention could have been linked to the deal struck on the £1.7 billion demand, which has been reduced to £850 million as a result of the UK's rebate, payable in instalments next year rather than by the original December 1 deadline.
"We were very surprised by what happened. When it came to the crunch Britain abstained," the diplomat was quoted as saying.
"The only rationale is that they are giving full priority to the membership fee and they have put down all their other objections and struck a deal with regard to that."
The Treasury insisted there had been no deal with the commission, and the decision to abstain was simply because the extra £2.4 billion was a "reprofiling" of the existing budget.
A Treasury spokesman said: "The Government is approaching discussions on the EU budget in the same way it always does - getting the best deal for British taxpayers.
"Thanks to the deal secured by the Prime Minister last year, the size of the EU budget will fall this year compared to last year."
But shadow chancellor Ed Balls said: "George Osborne needs to come clean about his secret deal in Brussels over the EU budget.
"British taxpayers know he failed to reduce Britain's bill and simply got some extra time to pay it. That was already a bad outcome as Britain's net contributions didn't change by a single penny.
"Now it's clear the price for that poor deal was dropping Britain's opposition to extra EU spending of 3 billion euros.
"The Chancellor has been desperate to make this story go away, at least until after the Rochester by-election. But his attempts to keep the truth from the British people have now totally unravelled."