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EU Bill Claim 'Not Supported By Facts'

George Osborne's claim that he halved a £1.7bn EU surcharge in negotiations last year is "not supported by the facts", according to a report.

Labour described the report by the cross-party House of Commons Treasury Committee as "damning", and called on the Chancellor to apologise.

Chris Leslie, the party's Treasury spokesman, said the claim was "completely false".

The EU bill, which related to a recalculation of Britain's gross national income dating back almost two decades, caused anger when it was issued in October.

David Cameron voiced "downright anger", and insisted he would not pay by the 1 December deadline set by the European Commission.

Mr Osborne emerged from a meeting of fellow EU finance ministers on 7 November and declared that Britain would pay just £850m, telling journalists: "We have halved the bill... it's a result for Britain."

But the Treasury Committee report found that claim was "not supported by the facts" and the department should have known "well in advance" of the meeting that the demand would automatically be cut in half by Britain's regular EU rebate.

According to the report, there "does not appear to leave a great deal of room for uncertainty" that the rebate would "inevitably" apply, and that "this should have been clear to HM Treasury" once it became aware of the revised figures that sparked the surcharge.

Addressing MPs days after the meeting, Mr Osborne said it was "not clear" that the rebate would apply to the surcharge to the extent that it did.

The Chancellor maintained this position when he gave evidence to the Treasury Committee the following month.

The committee said in its report it found Mr Osborne's argument "unpersuasive", adding: "The specific claim to have halved the bill through negotiation is difficult to support."

The report said: "On the basis of the evidence the Committee has seen, it should have been unambiguously clear to the Treasury, well in advance of Ecofin on 7 November 2014, that the UK was entitled to a rebate on any additional budget contributions that could arise from the GNI revisions."

Mr Osborne was correct to claim victory in securing agreement for the UK's payment to be delayed until the following year without interest being charged, the report found.

But it added: "This delay of the UK's bill, part of a permanent change to the EU's financing rules, was a considerable achievement.

"By claiming a victory for having 'halved the bill' - a claim not supported by the facts - the Chancellor distracted attention from that achievement."

Mr Leslie said: "Too many times this Chancellor has desperately tried to use smoke and mirrors to fool the British people.

"He has been caught out again and his credibility is further undermined.

"People will now treat the false claims he makes in the coming weeks with the contempt they deserve."

A Treasury spokesman said: "The deal the Chancellor secured on the surcharge was not a technical clarification, it was a hard fought negotiation that halved the payment and delivered a real result for Britain.

"We note that the Treasury committee did not raise the possibility of the rebate applying at any point before the result of the negotiation was announced."