Congratulations are in order to Tony Blair. Not only have he and his pal Mandy managed to scupper WTO talks on trade liberalization he has also managed to cave in to the French farmers lobby and cause extra pain for British tax payers. It is probably true that, as numerouspeople have pointed out, the annual sums are comparatively small compared to other things such as new aircraft carriers or pensions for bureaucrats, but that surely should be the point. If the sums are so small and the harm they produce so great why do we spend them?
Tony "the rebate is not negotiable" Blair is handing over €10.5B over 7 years in exchange for a promise that "the EU will review all its spending in 2008-2009, including the expensive Common Agricultural Policy." Does the phrase "sucker" spring to mind? the only international agreement in recent years that gives up so much for so little return has been the AngloFrancoGerman deals with Iran where we ask them nicely to stop making a nuclear bomb or else we'll hold our breath and the Mullahs say, essentially, "go ahead punk make my day."
So the question is why? In theory, at least, Phoney Tony could have lived up to his Live8 related promises about "trade not aid", kickstarted the WTO talks and forced a reform of the EU CAP by simply (and unilaterally) stating that the UK would not be contributing a single Eurocent to the 46% of the EU budget that is blown on the CAP. This would have removed the rebate entirely since the reate was designed specificially to rebalance the UK's contribution given its general lack of agriculture (relatively speaking) and would have forced the CAP to be reformed and would have forced the EU to reduce its agricultural tarriffs and thereby helped the WTO talk and the developing world.
The BBC has a very good explanation of the background to the rebate which includes the chart below: The chart above shows that the UK (before rebate) contributed approx 15% of the EU budget or some €18B in 2004. 46% of that would be just over €8B or approximately one sixth of the CAP budget (€49B in 2004). A British leader that had the balls that Mrs Thatcher did could have forced reform of a system that is almost universally reviled yet Blair, on the other hand, shows that he has apparently handed his balls over to someone else along with his the spine.