Martin Callanan suggests David Cameron might need Margaret Thatcher's handbag for the EU budget negotiations

By Jonathan Isaby
^{Follow Jonathan on Twitter}

9pm update:

The BBC confirms that the European Commission wants its budget increased by nealry 5% for the next seven year period. It quotes a British Government spokesman as saying: "A 4.9% increase would not be acceptable to us... We will work very closely with other EU governments to drive the hardest possible bargain."

9.45pm update:

A statement from a Downing Street spokesman just released reads:

"The EU budget increase that the Commission has proposed today is unrealistic. Britain and the EU's other largest payers made clear in December that the EU budget should be frozen, and we will stick to that.  The EU has to take the same tough measures as national Governments are taking across Europe to tackle public deficits. That means a restrained EU budget focused on the things that will get our economy growing."

"Britain will also oppose new EU taxes which will introduce additional burdens for business and damage EU competitiveness. And we will continue to protect the rebate – without it, the UK’s net contribution as a percentage of national income would be the largest across the EU, twice as large as France’s and Italy’s, and almost 1½ times bigger than Germany’s."

---

Today's Daily Mail reported European Commission plans for an inflation-busting 12% increase in the EU Budget, whilst the Independent reported that it wants to introduce a new EU-wide tax.

Martin Callanan, the eurosceptic leader of the Conservative MEPs, has reacted angrily to those suggestions, along with rumoured efforts to completely abolish the British rebate.

Agreeing the European-wide "Multiannual Financial Framework" for 2014-2020 is set to dominate discussions at a European level during the second half of the year and today Callanan proposed three red lines over which he believes the UK should not step in the negotiations - and where he believes the UK Government should threaten to use its veto:

1. any reductions to the UK rebate;
2. any new taxes levied at a supranational level;
3. any increase in spending.

He explained:

"Just as national governments and households are having to prioritise their spending, so should the EU. This kind of opportunity to adjust the priorities of the EU budget comes only every seven years so we must not pass it up. The budget should provide value for money by investing in infrastructure and research, not by funding cultural programmes and tobacco farms.

"Unfortunately the prevalent mood in Brussels is towards a budgetary reform that would see more British taxpayers' money spent by Brussels, with Eurocrats deciding our levels of taxation in the future. This is completely unacceptable and the British government should not hesitate to use its veto powers if necessary.

"The current EU budget has been proven to be riddled with errors and spent on many wasteful projects. Instead of more EU spending we need smarter and better controlled EU spending so that the EU does less and provides better value for money.

"While Mr Cameron can rely on Conservative MEPs for support, regrettably the wider European Parliament has very different ideas for how this budget should look. The European Parliament sees 'more Europe' as the solution to any problem, and it also sees more EU spending as a panacea.

"These negotiations are bound to be tough for the Prime Minister. He may need to borrow Baroness Thatcher's handbag* for them."

* If David Cameron is after a Thatcher handbag, this one was alas sold at auction this week.