Cameron will pay the EU its billions; Ukip will cost him much more

It’s the 2.1 billion euro question: “Is Cameron going to pay the £1.7bn?” a London cab driver asked me last week. The answer, despite the prime minister’s angry outburst on the subject, is almost certainly “yes”, though there will no doubt be some haggling over the timing and over minor details.

The operative phrase he used in his teenage outburst of rage at being the last person to be told about the back payment was: “I am not going to pay that bill on 1 December.” That leaves 23 payment days before Christmas.

The story of how the prime minister was effectively ambushed by a Financial Times scoop – officials had been hoping that the subject could be finessed at what was billed as an EU summit on climate change – is comic but potentially tragic.

Contributions to the Brussels budget are based on a complex formula, the details of which I do not propose to bore readers with on a Sunday morning. Suffice it to say that boasting by successive British governments since 2002 about our putatively better economic performance than most members of the eurozone has met its comeuppance. Pride comes before a fall. National income turned out to be higher than expected, but revisions to the Brussels formula lagged behind.

Add in the amazing fact that the statisticians are now required to include financial estimates of the contribution of prostitution and the drugs trade to our national wellbeing – for the second column running, I feel it necessary to emphasise that I am not making something up – and up goes the contribution to the EU budget based on national income.

The £1.7bn comprises back payments of £150m a year over 11 years since 2002. The implications of the national income revisions for the EU payments were known by low-level British officials for months. But the idea that this might come up at the summit seems to have dawned in Whitehall only when low-level Danish officials alerted their counterparts in London at the beginning of the week of the summit.

Chancellor Osborne was informed, according to the Financial Times, but did not pass on the hot news to the prime minister. Now, Messrs Cameron and Osborne have a far better relationship than certain predecessors, so the question arises: did the chancellor actually read his brief? He is not known to be that interested in matters European and seems to have taken a laid-back approach.

I am reminded of his predecessor of many decades ago, one Reginald Maudling. Reggie was notoriously laid back but very clever, and could master a brief in the back of an official car. Osborne was probably too busy thinking about Ukip to bother with details of the EU budget. Maudling would not have made such a mistake.

Here lies the rub. Resentment about payments to Brussels and the Ukip phenomenon are intimately related. It matters not that we benefit hugely from membership of the European Union and that the EU budget is a mere pittance, amounting to 1% of the combined GNP of the 28 members of the EU. It matters not that the extremely nasty Ukip organisation actually draws money to finance itself from the EU it opposes. Ukip is crazy enough to urge our withdrawal, as are far too many rightwing Tory MPs, and the prime minister is running scared.

Now, having made the historic mistake of not joining the European Economic Community at its inception in the mid-1950s, Britain spent more than a decade trying to rectify its mistake during the 1960s and early 1970s. Our application was vetoed twice by President de Gaulle, in 1963 and 1967, first under the Conservative government of Harold Macmillan and later under the Labour government of Harold Wilson.

It was the Conservative government of Edward Heath that made it a case of third time lucky in 1972-73. Heath had a good relationship with de Gaulle’s successor, president Georges Pompidou. De Gaulle, despite having been Britain’s wartime guest, had a good relationship with few people north of Calais.

We have reached the stage where the estimable Financial Times feels it necessary to warn that, in his panic reaction to Ukip, with his series of futile sops to that Cerberus, “Mr Cameron looks like someone who will do anything to save his premiership and his party, whatever the cost to his country.”

That is a terrible thing to have to say about a Conservative prime minister whose predecessor, Heath, did so much to effect our final entry in 1973, at a time when the Labour party was deeply divided on the issue.

In his magisterial second volume of the Official History of Britain and the European Community, Stephen Wall quotes the remarks of Bernard Donoughue, senior policy adviser to Wilson, about the 1975 referendum over whether we should remain in the European Community we had joined only recently. Wilson said that a victory for those who wished to leave would empower “the wrong kind of people in Britain … who were often extreme nationalists, protectionist, xenophobic and backward-looking”. Enter, stage right, the people Cameron once referred to as “fruitcakes”.

Powered by article was written by William Keegan, for The Observer on Sunday 2nd November 2014 00.04 Europe/London © Guardian News and Media Limited 2010