11.30am

Britain gains EU windfall

Staff and agencies
guardian.co.uk, Wednesday 30 May 2001 01.20 BST

Britain is getting a £2.8bn European Union rebate because the European Commission spent less on regional aid last year than expected.

The EC, which handles EU finances, is giving member states a total windfall of £6bn, it announced today.

Britain gets a large chunk of the overall figure because it is the EU's third largest contributor.

The payback will be a useful weapon for the Labour party as it tries to combat the Conservatives' pre-election anti-Europe stance.

News of the windfall emerged just a day after EC president Romano Prodi called for a new tax to pay the EU's £60bn annual running costs.

According to the most recent figures, in 1999 Britain paid 13.5% of the EU's running costs. Germany paid 26.4% and France 17.2%.

Until 1984 Britain was the highest net contributor to Brussels because its relatively successful farming sector qualified for less cash support than most other countries.

This led to a "my money back" battle led by then prime minister Margaret Thatcher, which ended when the rest of the EU agreed a permanent system of rebates to compensate the UK treasury.