Britain facing £1bn fines over use of EU money

Britain is facing fines from Brussels of up to £1 billion over the way it uses money from the European Union, it was disclosed today.

Some £398 million of so-called "financial corrections" have already been imposed by the European Commission and the Treasury has set aside another £601 million to cover further penalties.

The money is stopped when the Commission feels that countries have failed to meet its rules and regulations on the allocation of cash. Most of the problems relate to agricultural payments.

The figures were highlighted by the National Audit Office in a report published today on Britain's use of EU funds.

Auditor general Amyas Morse has qualified his opinion of the 2008/9 accounts, saying there was "a number of significant accounting and other issues" which the Government needed to address.

"The confirmed losses totalling £398 million set out in this report and the provisions for further losses of £601 million... represent huge past costs and potential future costs to the taxpayer of implementing EU schemes in the UK," Mr Morse said.