In Defence of Liberty

Driven by data; ridden with liberty.

EU Membership Fees

In the British referendum on membership of the European Union, every part of our relationship is contested.

The Vote Leave campaign, who wish Britain to secede from the EU, states in increasing prominence, including on the campaign battle-bus:

We send the EU £350 million a week. Let’s fund our NHS instead.

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This claim is on almost all Vote Leave literature. (Source: Salisbury Journal)

This is a misleading claim.

The membership fee for the European Union is based upon government revenue from Value Added Tax and gross national income, calculated in euros.

For 2014, the gross payments, including 75% of the EU’s “traditional own revenues” related to Britain, were £18.8bn [1]. The rebate is then taken off, which was equal to £4.4bn in that year. This money never crosses the exchanges, so it cannot be true that we “send” the gross amount of the EU.

Through the European Agricultural Guarantee, and other means, the European Union also spends money in Britain via public sector organisations. These payments totalled £4.6bn in 2014. This means that Britain’s net EU contribution, excluding any private sector receipts, was £9.8bn for 2014.

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For the public sector, the net contribution is £188m a week, not £350m. (Source: BBC)

There are serious problems with claiming that the gross EU contribution can be wholly, or mainly, allocated to the National Health Service, if Britain were to vote to leave.

Firstly, this ignores the rebate, which is not money we send across.

Secondly, if we exited the EU, it is plausible that the government would have maintain all current EU funding, at least for an interim period, to ensure stability of their recipients. This means that money could not then be dedicated to other projects or departments, such as the National Health Service.

Thirdly, depending on the depth of our new relationship with the EU, we may still be making contributions to the EU budget. The House of Commons Library compared contributions per head for Britain versus Norway and Switzerland [2]. In 2011, the UK had a net contribution of £128 per capita, and Norway had a net contribution of £106 per person.

For Switzerland, that figure was estimated to be around £53 per head. Again, this money would already be spent.

Sir Andrew Dilnot CBE, the Chair of the UK Statistics Authority, has described the claims as “potentially misleading” [3]:

I conclude that there is a lack of clarity in the way the official statistics have been drawn on in the statements I have considered. In particular, I note the use of the £350 million figure, which appears to be a gross figure which does not take into account the rebate or other flows from the EU to the UK public sector (or flows to non-public sector bodies), alongside the suggestion that this could be spent elsewhere. Without further explanation I consider these statements to be potentially misleading.

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The EU net contribution is much smaller than the initial, gross amount. (Source: Full Fact)

Placing such a dubious claim at the centre of your campaign is hardly the sign of open and honest politics.

(Video: Vote Leave)

References

[1] HM Treasury, 2015. European Union Finances 2015. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483344/EU_finances_2015_final_web_09122015.pdf [Accessed: 23rd May 2016]

[2] Thompson, G., and Harari, D., 2013. The economic impact of EU membership on the UK. House of Commons Library. Available from: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06730 [Accessed: 23rd May 2016]

[3] UKSA, 2016. Letter from Sir Andrew Dilnot to Norman Lamb MP 21/04/2016. Available from: https://www.statisticsauthority.gov.uk/wp-content/uploads/2016/04/Letter-from-Sir-Andrew-Dilnot-to-Norman-Lamb-MP-210416.pdf [Accessed: 23rd May 2016]

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  1. Pingback: The Treasury Select Committee Report on EU Membership | In Defence of Liberty

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This entry was posted on May 31, 2016 by in European Politics and tagged , .
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