José Manuel Barroso said that the rebate, negotiated by Margaret Thatcher in 1984, had been agreed for reasons that no longer applied in a bigger EU with new, much poorer members. “Let me be very frank: now we are in a very different situation from 20 years ago. Now we are 25 members. At that time we were 10,” Senhor Barroso told Breakfast With Frost on BBC One. “Those new members are much, much poorer than the former ones and Britain on the other side is much more prosperous today than it was 20 years ago.”

Part of the reason for agreeing the rebate was to compensate Britain for taking proportionately less in agricultural subsidies than other large countries such as France. But that too had changed as the Common Agricultural Policy took up less of Europe’s budget, Senhor Barroso added. He said: “The rebate was found for Britain because there was legitimate concern of Britain, almost 70 per cent of our expenditures in [the] European Commission were with agriculture. And now in the proposal that we are putting forward it will be about a third.”

He predicted that a way through would be found that met Britain’s legitimate concerns. Britain could use its veto to block proposals that removed or diluted its rebate, but doing so would risk undermining alliances on other issues.

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