David Cameron faces Tory rebellion over EU budget - BBC News

31 October 2012 Last updated at 01:28 ET

David Cameron is facing a rebellion in the House of Commons over his policy on the European Union's long-term budget.

The prime minister has told his European counterparts the budget should be frozen in real terms.

But dozens of Tory MPs have signed an amendment backing a cut, and Labour also say it should be reduced.

MPs are due to debate the EU's 2014-2020 budget proposals in what is being seen as a test of Mr Cameron's authority on Europe.

Downing Street said the final budget deal had to be "acceptable" to the UK.

Negotiations over the EU's next long-term budget, called the Multiannual Financial Framework (MFF), are taking shape amid calls from the UK and other nations for restraint at a time when many countries are pushing through unpopular domestic austerity measures.

'Inappropriate'

The European Commission has proposed a £826bn (1.025 trillion euros) budget ceiling for the period up to 2020, equivalent to 1.03% of EU gross national income (GNI). That is a 5% rise compared with the 2007-2013 budget.

Agreement must be reached by all member states and the European Parliament on a new deal.

Mr Cameron has said any above-inflation increase in the budget would be inappropriate at a time when member nations are having to make tough spending decisions at home.

He has said he would be prepared to veto any unacceptable proposal - budget decisions require the agreement of all 27 member states.

But some Conservative MPs want the UK to go further and demand a reduction in real-terms spending in future negotiations, starting at next month's EU council meeting.

The Tory rebels said they believed 40 to 60 of their colleagues would back the amendment.

MPs who have already signed the rebel amendment include Zac Goldsmith, Bill Cash, John Redwood and Bernard Jenkin.

But, writing for the Conservativehome website, fellow Conservative MP Andrea Leadsom said the amendment was "wrong for Britain" as it did not focus on where money would actually be spent on a year-by-year basis.

"It won't produce the reform that British voters are looking for, and it could ironically result in higher cost to Britain's taxpayers, while damaging our scope for negotiations on the direction of expenditure," she said.

Budget 'increases'

Labour have indicated they could back Conservative rebels on Wednesday and vote for a budget cut, increasing the pressure on the government's Commons majority.

In 2011, the UK's net contribution to the EU budget was £9.2bn after its £2.86bn rebate.

Spending on agriculture and support for Europe's poorer regions - known as cohesion funds - account for about 80% of total proposed EU spending between 2014 and 2020.

MEPs want spending levels for those major budget items to be at least maintained at the 2007-2013 level but also want "significant increases" in budgets for competitiveness, small business, sustainable infrastructure and research and innovation.

EU leaders will hold a budget summit on 22 and 23 November. If no agreement is reached by the end of next year, the 2013 budget will be rolled into 2014 with a 2% rise to account for inflation.