UK tapped for £1bn as EU blows budget

Brussels is to bill Britain £1bn extra because it's blown its 2012 budget. Brussels will pitch its demand for UK taxpayer cash - £976 million, to be exact - in late October, shortly before MEPs rubber-stamp a 7% hike in the EU's annual budget.

The move puts more pressure on the UK government's relationship with Brussels as EU spending strays, again, beyond previous estimates.

Budget blow-out

The new Brussels £976 million bill comes at a time when the disparity between swelling EU budgets and swingeing cuts - particularly for the elderly and vulnerable - at home appear increasingly out of touch.

Additionally, the new EU budget comes in at well over twice the rate of inflation. From the EU end, it argues that the budget increase is needed because the extra cash should support jobs and growth.

At the sharp end, many of the cuts - both in the UK and in the EU - have yet to take full effect. Earlier this year The Institute for Fiscal Studies claimed 80% of planned reductions in spending remained still had to be followed through, with many government bodies and departments opting for easy wins before taking tougher decisions.

Euro army?

So the new Brussels bill couldn't be more unwelcome. Where there has been recent talk of reduced EU spending is in the realm of defence however. But this also pushes towards, perhaps, a new pan-European joint foreign operations arm, even a European army.

There is also talk of a new, directly elected European president, with greater powers given to a European parliament. The backers for such moves include Germany, France, Italy, Spain and Poland, though not the UK.

David Cameron remains under pressure to claw back £4bn from the EU spending pot, earmarked for spending on poorer parts of the EU. Some MPs argue that the money should be spent on redeveloping poorer parts of the UK.

Meanwhile referendum hopes were recently downplayed by David Cameron.
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