Tim Sebastian
Prime Minister, you said the deal which you got here was satisfactory. How good is “satisfactory”?
Prime Minister
Well, much much better than I expected to get when I came to Fontainebleau. As you know, I was very cautious about what I said would happen, and I did not even know whether we would be able to reach an agreement. We have got 66%; of a certain gap between what we put in and what we get out. Not quite the whole amount, but it is 66%;, and it will last much longer than any previous agreement.
Tim Sebastian
Well, how lasting will it in fact be, because the French President has said this is not a permanent agreement?
Prime Minister
Well, you know how the finances of the Community are arranged. One of the factors is that we give 1%; of our Value Added Tax to the Community. Now, that 1%; can only be changed by unanimous agreement of each and every state and by agreement of each and every one of their parliaments. Now, we have agreed, as far as Ministers [end p1] are concerned, to put the percentage up from 1%; of Value Added Tax to 1.4%; … . authority to go up to that. Our refunds are linked to that 1.4%;. That means they can never get any more resources and increase in VAT without our agreement, and we are not likely to give an agreement to increase resources any more, unless we likewise got a similar arrangement about satisfactory refunds to us.
Tim Sebastian
Do you think we have finally got away from the ritual haggling over money, which has characterized so many European sessions?
Prime Minister
Yes, I think so. I have had to do it so often. I started in Strasbourg in June 1979, and then we got an arrangement which lasted two years until 1980/81, but for the third year, we did not get a formula and so there was haggling over that. Then, last year, as you know, we had no formula and we just had to get whatever arrangement we could and we got something that was not unreasonable at the time, but then they blocked the refunds and they were staying blocked until we had a much bigger look on a longer-term basis at how the Community was financed. We have had that, and now this will continue and be linked to the increase in own resources of the Community, increase in VAT of the Community and that cannot be changed without [end p2] our agreement. It is very complicated. I am so sorry. It is full of jargon, but I assure you it is a reasonable agreement.
Tim Sebastian
Prime Minister, where did you have to compromise to get this accord?
Prime Minister
One would always like 100%; of one's contribution, so that anything one put in one got out, but that just is not possible. There are a number of people in the Community who are less well off than we are and, of course, they take out, and so do some other people. But bearing in mind the terms on which we entered—and those were the terms which this year would have made us contribute about £1200 million—if we had had no refunds that is what we would have been contributing. But, of course, we have very substantial refunds, but we had to negotiate them.
Tim Sebastian
You said they were very arduous discussions. But they must, in fact, have meant that relations had got pretty sharp between you and some of the other leaders? [end p3]
Prime Minister
Well, they were arduous, exasperating and frustrating, because they say: “Look! These are the terms on which you entered. You knew what you were doing, etc. etc.” and I have been saying: “You know full well that when the transition period is over, you said that if unacceptable situations arose, you would meet us!” That is the only basis on which we had to negotiate. Now, naturally, some of them very much like receiving their benefits and we did not mind paying as much as we could, so it was a plain, straightforward negotiation and persuasion, of saying: “Look! If you were in my position, you would be asking for the same!” (AEROPLANE NOISE DROWNS THE LAST PART OF THE INTERVIEW)