Cameron set to win a cut in the EU budget - but there's a catch

Even if European leaders agree to a €34.4bn cut in the EU budget, the UK will almost certainly pay more.

David Cameron went into the EU budget negotiations insisting on "at worst a freeze, at best a cut" (Labour and rebel Tories had demanded that he go further and insist on a cut) and after a long night of talks, it looks as if he's secured the "best". For the first time in its history, the EU is set to agree to a cut in its next seven-year budget. Earlier this morning, EU president Herman Van Rompuy tabled proposals that would see the union's spending limit for 2014-20 reduced from €942.8bn to €908.4bn - a  €34.4bn cut and a saving of £400m-a-year for British taxpayers. 

If approved - EU leaders have just taken a two-hour break from the onerous negotiations - a cut would be a triumph for Cameron. He will have defied those who claimed that his promise of an in/out referendum on Britain's EU membership would leave him unable to achieve a successful outcome.

The catch, however, is that regardless of whether the EU agrees to a real-terms cut in its budget, the UK's net contribution will almost certainly increase. This is largely due to a reduction in the British rebate agreed by Tony Blair in 2005 to meet the cost of EU enlargement (a cause the UK had championed) but a cut in the EU budget will look less impressive to voters if it turns out that we'll still be paying more. Tory MP Mark Pritchard, one of those supported a real-terms cut when the Commons voted last October, tweeted this morning: "It will be a historic, but 'bitter-sweet' outcome, if the PM negotiates a real terms cut in the EU budget but sees the UK contribution rise".

In addition, the overall budget will still need to be approved by the EU parliament and German Social Democrat Martin Schulz, the president of the parliament, has been making sceptical noises this morning. He is threatening to veto the proposed deal on the grounds that it would create a structural deficit. "The [budget] in the form currently being proposed, however, would turn what is already a legally highly questionable trend into a structural deficit," he told EU leaders. 

Worst of all, while spending on the bloated Common Agricultural Policy (a slush fund for assorted land-owning dukes, earls and princes) will be €1bn higher than under the previous proposal, spending on transport, telecommunications and energy projects, all vital pro-growth areas, will be €11bn lower. 

Yet given how few expected him to be in a position to announce any kind of cut, Cameron will rightly feel that the summit has been a success for him. Having once refused to contemplate a reduction in spending, EU leaders now make Cameron-esque noises about the need for restraint at a time when EU member states are enduring austerity. The draft conclusion states: "As fiscal discipline is reinforced in Europe, it is essential that the future Multiannual Financial Framework [the seven-year budget] reflects the consolidation efforts being made by member states to bring deficit and debt onto a more sustainable path. The value of each euro spent must be carefully examined." Arch-eurosceptic Douglas Carswell has offered the PM "three hearty cheers" this morning and so will many others in his party. 

David Cameron arrives at the EU Headquarters on February 7, 2013 in Brussels. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Could Jeremy Corbyn still be excluded from the leadership race? The High Court will rule today

Labour donor Michael Foster has applied for a judgement. 

If you thought Labour's National Executive Committee's decision to let Jeremy Corbyn automatically run again for leader was the end of it, think again. 

Today, the High Court will decide whether the NEC made the right judgement - or if Corbyn should have been forced to seek nominations from 51 MPs, which would effectively block him from the ballot.

The legal challenge is brought by Michael Foster, a Labour donor and former parliamentary candidate. Corbyn is listed as one of the defendants.

Before the NEC decision, both Corbyn's team and the rebel MPs sought legal advice.

Foster has maintained he is simply seeking the views of experts. 

Nevertheless, he has clashed with Corbyn before. He heckled the Labour leader, whose party has been racked with anti-Semitism scandals, at a Labour Friends of Israel event in September 2015, where he demanded: "Say the word Israel."

But should the judge decide in favour of Foster, would the Labour leadership challenge really be over?

Dr Peter Catterall, a reader in history at Westminster University and a specialist in opposition studies, doesn't think so. He said: "The Labour party is a private institution, so unless they are actually breaking the law, it seems to me it is about how you interpret the rules of the party."

Corbyn's bid to be personally mentioned on the ballot paper was a smart move, he said, and the High Court's decision is unlikely to heal wounds.

 "You have to ask yourself, what is the point of doing this? What does success look like?" he said. "Will it simply reinforce the idea that Mr Corbyn is being made a martyr by people who are out to get him?"