Brussels bill not out of control, says UK Treasury

Britain's contributions to the EU were not much higher last year than had been expected, the government insisted on Friday, despite official figures showing a surge in the bill.

In its annual detailed assessment of the balance of payments, the Office for National Statistics calculated that the British government's net contribution to the EU jumped by one third in 2013 to £11.3bn from £8.5bn the previous year. By comparison, the annual budget of the Home Office is £11.1bn.

The dispute highlights the sensitivity of net contribution figures and comes after Business for Britain, a group that campaigns for a better deal from the EU, said: "The cost of the EU to UK taxpayers continues to spiral out of control."

The ONS's £11.3bn estimate of the 2013 net contribution did not include the additional £1.7bn top-up bill Britain received a week ago to reflect understatement of national income since 2002, but was still much higher than the Office for Budget Responsibility's most recent estimate of £9bn for the 2013-14 financial year.

While acknowledging that the UK has been steadily contributing more to the EU to reflect the increase in its relative wealth and the previous government's agreement to give up some of the British rebate, Treasury officials said there was no evidence the bills for the EU were out of control.

They did not expect the OBR to be forced to raise the estimate of spending on EU services significantly in December's Autumn Statement.

The 2013 figures were higher than the OBR estimate, according to officials, because many of the payments occurred in the first quarter of that year and were therefore included in the fiscal watchdog's 2012-13 financial year estimate. The OBR 2012-13 net contribution estimate of £9.7bn is significantly higher than the ONS 2012 figure of £8.5bn. EU expenditure in 2013 was unusually high because it was the final period in a multiyear budget settlement, the officials said.

Moreover, the officials added that the ONS figures did not yet include Britain's rebate, which is paid a year in arrears and the ONS has recently revised down its estimate of the net contribution for 2012 by £1bn.

Arguing there was no evidence that the bills were spiralling out of control, the Treasury said that OBR forecasts showed a roughly stable net contribution of about £9bn a year until 2018-19 as a result of the tougher budget within which the EU had to operate in future.

An additional complication in the national accounts, said an aide to George Osborne, chancellor, was that the most commonly cited figures suggested Britain did not benefit from EU payments to households, such as the money British farmers received under the common agricultural policy.

Once this money was included as a use of British spending, the aide said, the Treasury's annual analysis of where public spending went showed money that funded the EU and never came back was as low as £5bn in 2013-14 - less than half the figure in the ONS accounts.

"I think that is what most people would consider the real net contribution," said the aide. That contribution has been rising, but the Treasury forecast is that the total net contribution will fall from £5bn in 2013-14 to £3.5bn in 2015-16.

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