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European Council, 16–17 June

My Lords, the word ““rebate”” is accompanied by many pound signs and is engraved on my heart, as I was one of those who took part in the negotiations that led to the creation of the rebate under the command of the noble Baroness, Lady Thatcher. Indeed, I was one of four people, including the noble and learned Lord, Lord Howe of Aberavon, whose opinion was asked for in the last few minutes of an extremely long negotiation before we finally achieved that rebate. First, does the noble Baroness agree that we must continue to stress that this rebate is an intrinsic part of the system with no time limit and that it was freely agreed by the member states? That is the situation. It is not a gift that was donated to be taken away; it is part of the system. Secondly, we should stress, as the noble Baroness did, that it is a self-correcting mechanism, because it is based on the difference between our contribution and our revenue from EU funds. Any favourable change in the balance automatically decreases the rebate, which is not so much required. That system is built-in. It would be a great advantage to our position in presenting our case in Europe if we keep emphasising those points.