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UK pays EU £2.3bn after losing trade dispute

After losing a long-running dispute over trade, the UK has now paid PS2.3bn (plus interest) to the EU.

Before recess next week, the government made the announcement in a Written Ministry Statement.

These payments are due to a dispute over the importation Chinese textiles and shoes between 2011 and 2017, when the UK was still a member of the European Union.

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The UK was accused of failing to stop the undervaluation of these goods. Criminals were able to evade customs duties through false claims about shoes and clothes.

According to John Glen, chief secretary to the Treasury, the Court of Justice of the EU, ruled against the UK in March 2013.

It was found that over half of all footwear and textiles imported to the UK from China had been below “the lowest acceptable price”.

The European Commission is seeking PS1.7bn of compensation from the UK for its contribution to the EU budget.

The government paid an initial payment in June of last year of EUR678,372,885.63. This was, according to the government, the “minimum and indisputable amount that the UK considered due at that point in light of the CJEU judgement”.

The government paid another EUR700,351,738.31 last month – the remainder of the headline amount owed minus the portion due to the UK for its membership.

Glen stated that the final payment was EUR1,227884,519.53.

This was interest on amounts already paid. The total bill was EUR2,606,609 and143.47. That’s equivalent to PS2.3bn.

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Glen stated that although these are significant sums, they represent the final payments. It is the end of a long-running case. The UK has fulfilled its international obligations.

In 2021, the UK resigned from the EU customs union.

Downing Street: Payment is the ‘right thing’

When asked if the bill was a good investment of taxpayer money, a spokesperson for Downing Street said that it was “a legacy issue from our times as part of EU.”

“The payment ends a long-running case and protects UK taxpayers against the risk of additional legal proceedings and a larger bill. It was the right thing to make.

“Now, we can make our laws and are free from the EU.”

Glenn stated that the financial settlement had been taken into consideration and “the government has determined how additional PS14.6bn in spending by 2024-25 could be allocated to domestic priorities rather than being sent to the EU.”

“This extra spending was already included in overall spending plans that were established by the government at previous spending reviews.”


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