Jon Cunliffe, hailed by prime minister as hard-nosed Treasury official, declared cut in rebate was "within" his mandate
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Tony Blair cut Britain's EU rebate in 2005 after receiving formal Treasury approval from David Cameron's new man in Brussels. Photograph: Justin Sullivan/Getty Images
David Cameron looked mighty pleased with himself last week when he announced that Sir Jon Cunliffe, his main adviser on Europe, would take over as Britain's ambassador to the EU from next January.
The prime minister said that Cunliffe, who made his name as a hard-nosed Treasury official under Gordon Brown, will be the perfect official to help guard Britain's EU rebate in the forthcoming budget negotiations.
But is Cameron aware of one important detail which is unlikely to feature prominently on Cunliffe's CV? This is that Cunliffe formally handed Tony Blair authority from the Treasury at an EU summit in December 2005 which led to a cut in Britain's EU rebate.
I blogged last October that Blair turned to Cunliffe in the large room in the Justus Lipsius building, occupied by the British delegation which then held the EU presidency, to ask whether the rebate deal was acceptable. Cunliffe said:
That is within my mandate.
The story is recalled by supporters of Tony Blair who said that within days Brown trashed the deal. The then chancellor declined to point out that the central element of the deal – that the main reductions in the rebate would kick in during the latter stages of the seven year EU budget period – had been devised by the Treasury.
Blair had to give ground in Brussels because the enlargement of the EU by ten in 2004 – originally Margaret Thatcher's vision – meant that Britain would have become one of the biggest net beneficiaries if the rebate had been left unchanged. Every EU member state has to contribute to the rebate, meaning that relatively poor new members from Eastern Europe would have been sending large cheques to Britain, one of the richest member states.
Jonathan Powell, Blair's former chief of staff who was present for the 2005 budget negotiations, recalls in his memoirs how Cunliffe tried to interrupt Blair shortly before he tabled the budget in the European Council chamber at 1.00am. Cunliffe wanted to pass on a message from Brown on the overall size of the budget. This is what Powell wrote in The New Machiavelli:
Jon Cunliffe, the senior Treasury official, had been keeping Gordon abreast of developments by mobile phone as the negotiations continued. At the last moment Gordon demanded to speak to Tony, and Jon stood at the edge of the delegation room waving his mobile at Tony. Tony couldn't face it, turned a Nelsonian blind eye to the request and concluded the deal anyway. Gordon briefed the papers the next day that he was opposed to the outcome. When we got back to London, Tony asked him what he would have done instead. He said he would have insisted on a much smaller budget with a ceiling of only 1 per cent of EU spending. Tony asked him who would have supported that kind of position, and he replied the German finance ministry. Tony pointed out that that would not have been of much use when the German Chancellor herself had proposed a higher ceiling in the course of the negotiations.
Cunliffe's role, however reluctantly, in approving the cut in Britain's EU budget may be seized on by Eurosceptics. James Kirkup has blogged that Eurosceptics have already noted his role in helping to draw up the temporary EU bailout mechanism last year.