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George Osborne: Britain to pay half of disputed £1.7bn EU bill

George Osborne has said that Britain's disputed £1.7bn EU bill has been halved, delayed and will not include interest.

However, British officials told ITV News Europe Editor James Mates that the £850m of the bill not paid up front will be covered by a rebate Britain was due to receive in future.

Shadow Chancellor Ed Balls claimed the Chancellor was "trying to take the British people for fools" with the deal and has in fact not saved the taxpayer "a single penny".

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Osborne 'trying to fool public' over EU bill, says Ed Balls

David Cameron and George Osborne are "trying to take the British people for fools" by claiming to have "halved" Britain's £1.7 billion EU bill, Shadow Chancellor Ed Balls has said.

Labour's Ed Balls described the government's claims as "smoke and mirrors". Credit: PA

"Ministers have failed to get a better deal for the British taxpayer," Balls said after the deal was announced, adding that "not a single penny has been saved for the taxpayer" by the agreement.

While George Osborne said the Treasury would only have to pay £850 million up front, ITV News Europe Editor James Mates since reported that the other half of the bill will be paid by a proposed rebate that Britain may have been due to receive in 2016.

By counting the rebate Britain was due anyway they are desperately trying to claim that the backdated bill for £1.7 billion has somehow been halved.

But nobody will fall for this smoke and mirrors. The rebate was never in doubt and in fact was confirmed by the EU Budget Commissioner last month.

– Ed Balls, Shadow Chancellor

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