• That £1.7 billion addition: Now you see it…. Now you don’t!

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    As British Gazette Readers will have suspected, the brouhaha over the small matter of £1.7 billion was a classic coup de théâtre, a sleight of hand performed for the distraction of the populace by Messrs Cameron and Osborne aided of course by the EU Commission!

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    Rather than bore you Dear Reader with ploughing through myriad detail, this organ will illustrate what has gone on using a series of analogies.

    First things first: The £1.7 billion. You will doubtless have noticed the use by some companies seeking to sell high value goods (such as a digital camera) through the use of a sales promotion idea called “cash back” This is where you purchase the goods send in a guarantee form and then get some money from the store of the manufacturer/distributor of the product.
    Well this is the case with the £1.7 billion. On 1st December, the UK was liable to the tune of £1.7 billion to the EU. But that money which is part of the UK’s net contribution to the EU budget, is automatically subject to a “cashback” – it is called the rebate – payable about two years after the principal is remitted.
    Thus, on the morning of the 7th November, the bill stood at £1.7 billion – with a payment date of 1st December. Two years later the UK would have got the “cashback” of roughly £850 million.
    That Friday afternoon however, we learned that Osborne had negotiated a split payment – a half now half later deal with the first half payable on 1st September 2015 – without interest. Then, before the second half becomes due, the “cashback” (i.e., rebate) which would not normally have been returned until 2016, has been brought forward to become payable early. This has been set against the second sum due. As a result, the second half will not have to be paid.
    The worst thing however was the whole brouhaha was a complete charade, a coup de théâtre. You see, a special reduction in the UK’s contribution would have required negotiations with other affected member states. This has not been done. Because there was never any need! You see, there exists an EU Regulation Number 1150/2000. This enables “……a targeted and limited amendment….” to the aforementioned regulation to allow Member States with “…..exceptionally high balances…..” [the £1.7 billion] to defer the required payment over a reasonable period of time – up to 1 September next year!
    So there you have it! The coup de théâtre performed for your delectation!
    What is of course obvious is this demonstrates EXACTLY how Cameron – working in collaboration with “the representative of the partners” [the EU Commission] – will present to the British People the results of his “re-negotiation” – should he secure a majority for the Tories in 2015.
    So here is a question: Would you buy a digital camera from that camera shop on the High Street – Messrs. Cameron & Osborne?
    No?
    We thought not!

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