Britain's Treasury chief says the government wants the best deal it can get on a new European Union budget but isn't promising to get the reduction in real terms that the House of Commons has demanded.

Prime Minister David Cameron suffered a political defeat when rebels of his Conservative Party joined the opposition Labour Party in voting for a significant cut in the EU budget. Cameron has said an increase to allow for inflation would be acceptable.

Treasury chief George Osborne said Thursday that Britain would veto any deal "which is not good for the British taxpayer."

Osborne told BBC Radio: "What you saw last night was a debate about tactics, about the start of a negotiation."