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Analysis

Staying in EU would not lose our rebate

by Sam Ashworth-Hayes | 10.12.2018

The European Court of Justice has ruled that the UK can unilaterally revoke Article 50, so long as it does so before March 29. If we decide not to leave, then our membership is “under terms that are unchanged”.

Michael Gove’s scaremongering in the Daily Mail has therefore been proven comprehensively wrong. If the UK retracts its Article 50 notification, then we would keep the rebate on our budget contributions that Margaret Thatcher – a Conservative prime minister who actually knew how to negotiate – won for us.

The only fly in the ointment is timing. The EU is currently looking at proposals for the new budget period beginning in 2021, and this means revising the rules on rebates. These rules are set unanimously with the consent of all member states, so while the UK remains in the EU we can protect our rebate.

May’s handling of Brexit has left us out of the current negotiations, and the commission is now pushing to end all rebates when we leave. But so long as we retract this Brexit bone-headedness soon, we will be able to scotch the changes and keep our rebate.

Amusingly, the only realistic scenario where the UK pays into the EU budget without a rebate is if we leave with May’s deal. That requires us to pay the EU for the duration of the transition period. And if we extend that transition – as we will almost inevitably have to – then we will end up paying into the EU budget under the new programme. Without a rebate.

Edited by Luke Lythgoe

Tags: , , Categories: Economy, EU Law