An air of unreality

You have to give it to The Financial Times, which had the story of Blair being prepared to give up the rebate a full day before the rest of the media pack, so much so that we were able to run it in our own overnight posting yesterday.

Anyhow, the papers are running with it today, not least The Daily Telegraph which, under the heading: "Blair U-turn on Britain's EU rebate", reports that Blair has disclosed that he is prepared to give up the rebate, "despite assuring Parliament two weeks ago that he would not negotiate it away".

This is based on comments made by Blair after a meeting with Swedish prime minister Goran Persson, the Swedish prime minister, when he was asked whether there was any prospect of a deal during Britain's six-month presidency of the EU. Blair said he thought it was possible, declaring: "We have made it clear that we are prepared not just to discuss and negotiate, but to recognise that the rebate is an anomaly that has to go, but it has to go in the context of the other anomaly being changed away." The "other anomaly" was the CAP.

The Telegraph calls this an "about-turn on European policy". However, it says, Blair has also made it clear that ending the rebate could only come in return for radical reform of the EU's Common Agricultural Policy (CAP).

From there, as so often, the paper dives into the realms of fantasy, interpreting this as an "admission that the rebate's days were numbered", on which basis it makes the charge of a "U-turn". But, of course, it is no such thing. The paper presupposes that there will be "radical reform" of a policy that, since its inception, has proved remarkably resistant to such reform, and shows every sign of continuing to be so. In fact, Blair's willingness to trade off the rebate dwells in never-never land, only one stage removed from empty rhetoric. He might just as well make giving up the rebate conditional on Chirac rowing the Atlantic single-handed – in the nude.

Nevertheless, this gave Boy Wonder George Osborne, the Conservative shadow chancellor the opportunity to deliver a cheap, if headline-grabbing jibe, describing Blair as "more slippery than an eel in a tub of grease."

Predictably, though, Boy Wonder and the media are missing the point. In highlighting the fact that the rebate is an anomaly arising out of the skewed financial settlement which pays for the CAP, Blair is being perfectly reasonable in asserting that, if the CAP is "fundamentally reformed", the rebate could also be redundent.

The points that should be at issue, however, are two-fold. Firstly, there is the interminable timescale, in that Blair has accepted that the CAP settlement is locked in stone until 2013. Thus, all he is doing is pushing for a "mid-term review" of the budget agreement, to take place in 2008, with any agreement coming into force after 2013.

By 2008, however, the chances are that Blair will no longer be prime minister and, with a general election in (possibly) 2009, it may be the case that Labour is not in power by 2013 – which could also be another general election year. In other words, we are talking about events two full parliaments from now.

Secondly, there is Blair's apparent willingness to pay more in EU contributions – or, at least, his willingness to commit us to pay more. Here, he is not thinking straight. If there are fundamental reforms of the CAP and a complete overhaul of the budget, and the anomaly that gives rise to the need for the rebate disappears, then not only does the EU budget shrink drastically, but Britain's gross contribution also shrinks. Now, Blair might be willing to put more into the research, etc., kitty but, overall, we should end up paying substantially less, not more to the EU.

All of this, however gives the debate an air of unreality. It is not so much Blair who is "more slippery than an eel…" but the very nature of EU politics, which seems to prevent commentators from grasping the real issues.