Matt Ridley: Britain should give the EU £20 billion extra as an act of charity

The letter Theresa May should send with the cheque as Britain's "financial settlement" with the European Union:

Theresa May reportedly plans to offer about £40 billion of our money in order to bring the European Union to the table to discuss whether it wishes to trade freely with Britain after we leave in 2019. I listened to a German MEP last week describe these negotiations as “a French commissioner insulting an entire nation”, and heard a British MP call the EU’s obsession with money “disreputable”. The result is not humiliating for us, but for them. If I were Mrs May, this (tongue-in-cheek) is the letter I would write to accompany the offer.


Dear Angela, Emmanuel and others (cc Donald, Jean-Claude, Michel),

I enclose a cheque for £40 billion as agreed. However, you will notice that it is post-dated March 30, 2019, and that it will bounce without a free-trade agreement between us, as I mentioned on the telephone. We are delighted to be in a position to be so unilaterally generous, and sorry that you find yourselves in such dire need of our help.

As you will recall, under the Lisbon Treaty, the European Union is a legal “person” responsible for its own financial commitments, so we legally owe you not a penny after the current budget ends in 2020, a fact confirmed by a House of Lords committee. You may remember that your opening request for approximately €100 billion was taken apart line-by-line in a three-hour presentation at one of the bilateral meetings by one of our better civil servants.

As an EU source told a newspaper at the time, “everyone was completely flabbergasted that this young man from Whitehall was saying that the EU’s preparation on the financial settlement was ‘inadequate’. It did not go down well.” But the young man was right wasn’t he? We have since given him a bonus.

Nevertheless, as I say, we are prepared to go beyond the letter of the law and make a charitable donation, doubling the £20 billion we actually owe until the end of 2020. We cannot help feeling that a little more financial discipline on your part might have avoided the need for such a large sum. Perhaps you were misled by people such as Tony Blair and Nick Clegg into thinking that the result of our referendum could be reversed?

For instance, we notice that all Eurocrats can draw generous final-salary pensions when they get to the end of their lucrative careers, throughout which they will have had handsome allowances and expenses and have paid specially low income tax at a flat rate. In Britain we regard this as regressive, or “unfair”, and are unhappy that hard-pressed British workers in, say, Sunderland should now be asked to guarantee the pensions of such wealthy people, when they have no such guarantee themselves. (£20 billion is the equivalent of a 4p one-off surcharge on income tax, by the way.)

We realise you cannot agree among yourselves whether to cut the budget or increase the national contributions once the second largest net contributor leaves the European Union, so you are desperate for us to help you out. That we have filled your coffers for 40 years in this way, always giving more than we received, might in some circles have elicited a measure of gratitude. However, we are surprised on looking back through the files to find no such letters of thanks, but rather quite a few reprimands, insults and aspersions.

We note that this has continued during the course of the negotiations, where David Davis has been the soul of cheerful politeness, repeatedly saying that he hopes the European Union thrives after we leave. By contrast, I don’t recall your side saying the same about us, but there have been many leaks and briefings to the effect that we are fools and idiots. Twice there have been silly insults passed to the press after dinners attended by me, which hardened the British people’s resolve to leave.

It is true that much of our media, especially the BBC, has been unhelpful in this respect, treating Michel Barnier’s opening positions as if they were final offers, relaying every European annoyance but mocking any British one, and implying that Mr Barnier is an infallible offspring of Albert Einstein and Mother Theresa, while Jean-Claude Juncker is the reincarnation of the Angel Gabriel himself.

Moreover, your reaction to my Florence speech in September, in which I promised that no country in the European Union would be worse off as a result of our leaving, was really unhelpful to your own cause. You could have said “that is a magnificent gesture and we thank you”, which would have built trust. Instead you said, in essence: “This offer is pocketed but nothing is given in return; you must do more.” I know you like to think of us as a province in a Napoleonic “continental system”, but I have to say that it took an almighty effort on the part of Mr Davis and myself not to tell you to get stuffed at that point.

This episode is, of course, the reason we insist on moving in lockstep this time. You will also notice that the cheque is drawn from our foreign aid budget (given the political chaos in Germany, Italy and Spain, this seems appropriate) and counts towards our 0.7 per cent of gross national income spend on aid. This means you will have to fill out forms certifying that the money was not wasted. These must be returned to the Department for International Development punctually, and failure to comply may result in fines. I am sure you will understand that this is necessary given that the money would otherwise have gone to help starving and sick people in Africa.

Dear friends, we were surprised that you chose to try to squeeze money out of us before even talking about our future relationship, in breach of the spirit of Article 50 (which requires you to “take account of the framework for [the] future relationship with the Union in the arrangements for withdrawal”), as this seemed to elevate bureaucratic priorities over the economic welfare of ordinary citizens. We have done the sums on no trade deal and find they make little difference to the gains we make from free trade with the rest of the world. So you should realise that we are offering this cheque and a trade deal out of goodwill as friendly neighbours.

Tons of love,

Theresa

Matt Ridley, a member of the British House of Lords, is an acclaimed author who blogs at www.rationaloptimist.com.