John Fraser
Prime Minister, you have been battling for five years now to get a budget rebate deal for Britain. Has it been worth it?
Prime Minister
Oh, yes, and it is a fantastic relief to have got it at last. I was not very optimistic when I came to Fontainebleau. I thought we would have had to have done a good deal more work before we got here if we were going to get a settlement. We had been trying to do a lot of work, but we had not been getting the response, and so one came here, and last night, when I heard the preliminary results, because we started off a discussion in the full Council of Ministers and then let the Foreign Ministers do the detail—when I heard the results of what they had come up with I was very down in the dumps.
John Fraser
So what went right today? [end p1]
Prime Minister
We did a big fight back. We just put our case again and again with persistance—and it is a reasonable case—and gradually, they began to understand that we were serious and do not forget we had a major cards in our hands. Unless they gave us a reasonable settlement, we would have blocked any increase in finance for the Community, so we had something to negotiate with.
John Fraser
What exactly does the deal look like? How much money is Britain going to get over the next few years?
Prime Minister
It is going to be very difficult to calculate the precise amount. What I can say is we get a refund of 66%; of everything extra at the margin and that really is very good.
Of course, one would have liked 100%;, but one has to be reasonable as a partner.
John Fraser
Is that all that much better, though, than what has been offered over the last few years?
Surely by holding out, you have gained the animosity of the other EEC countries without gaining a great deal more money? [end p2]
Prime Minister
Ah! But I had not got anything on offer now. Nothing, nothing, nothing at all!
What we gained at the beginning was a three year settlement, of which the first two years were fixed on a formula. There was no formula for the third and they reckon we did so well over the first two years they beat us down on the third. Then they beat us down on the fourth even further, and then they withheld what we thought we were entitled to on the fourth year—that was ECU 750 million. They withheld that, so we had nothing for 1983. We had nothing agreed for this year and nothing for evermore on the old 1%; VAT contribution. We started with nothing, but we said: “Now look! The Community is running out of money. You are going to come to each of us and ask for more” and as you know, they take it in Value Added Tax. “If you are going to get more, you are going to give us a reasonable settlement and do not think I am going to agree to one penny piece more going across the exchanges unless you give us a reasonable settlement!”
So we really had something to battle with and they knew that I would actually withhold any more money going across unless they gave us a reasonable settlement, so we did have that card in our hands. But it was quite a fight.
But we had some friends, you know. President Mitterrand wanted a settlement very much. It was his presidency of the Community. And so did Chancellor Kohl, and then the others realized the reasonableness of our case [end p3] and we said “If you want more income, the price of more income is a reasonable refund to Britain.”
John Fraser
The budget battle is finally over. Did Britain win?
Prime Minister
I think we got a very very good deal, which is fair for Britain and fair for the Community. You know the outstanding characteristic of the British is they are fair and good partners; they are reliable allies. And we have also not only got the 66%; refund. They have unblocked, by a special regulation which they passed immediately, the 750 million in ECU—that is about £450 million, and that again will be very useful.
John Fraser
Hopefully, the budget battles are now over and the Community can start looking to the future. When you come to future EEC Summits as British Prime Minister, what do you want to see the Community doing?
Prime Minister
I think the first thing we have got to do is to get what is called a Common Market in services. You see, you have a Common Market in goods. They can go around, whether it is agricultural or manufactured goods, easily from one to another, and if a person is in insurance or in aeroplane [end p4] and air fares, then they cannot do that as easily. That is part of the Common Market and we have got to get that and it also means that in air fares it would be a great advance for ordinary folk.
We are going ahead. We are trying to get agreement on qualifications so that doctors, veterinary surgeons, accountants, can practice in each and every country in the Community. You have to go through the qualifications one by one. Some we have done. We will carry on doing more. And there are lots more things to do.
John Fraser
So the future is optimistic?
Prime Minister
I think the future is good.
John Fraser
Thank you very much!