In 2000 we agreed that financial contributions to the EU should be linked to Gross National Product because that is a sensible way to do it. Recently these figures were revised for incredibly boring reasons, R&D became value adding instead of a cost, some services which weren’t counted properly now are, and so on and on as boring and inevitable as statistics.
These revisions are important because of VAT, value added tax. Because part of the EU budget is paid for through VAT so we have to reassess how much we owe to the EU budget , it’s laid out in this pdf, via the FT. We’ve just found out we’ve added more value so should have contributed more tax. Those CRAZY Eurocrats.
It’s clear that David Cameron will pay this charge. He’ll make a big deal out of it, but he’ll pay. David Cameron made it his government’s mission to return the UK to a balanced budget. He’s not going to do that, but he wanted to move in that direction to protect the reputation and borrowing privileges of the UK.
The UK is in an a small club of countries which haven’t defaulted. There’s an advantage to keeping your promises and David Cameron wanted to sensibly protect that. People believing you is valuable and keeping your promises is the only way to guarantee that. I think he’s gone about it in a stupid way, and that’s his prerogative, his intention was to protect the UK’s history of keeping promises.
That’s why he’ll pay this. The UK updated its 1994 agreement 14 years ago and promised to pay. So pay it we will. Paying your debt means keeping your promises. If David Cameron cares about keeping the UK’s word he’ll pay up. He thinks he can play the offended statesmen for the home media without worrying lenders and he’s probably right, but if he wants to be a proper statesman he should shut up and pay up.