Tiger of the Stripe Blog

Economics: the Cost of EU Membership

Although many facts about the EU are hotly contested, the approximate amount which the UK pays to the EU and the amount it receives back are not really open to question. The estimated UK contribution in 2015 was £17,779,000,000, less £4,861,000,000 rebate, giving £12,918,000,000 net contribution. The estimated UK public sector receipts from the EU (that is, money which the EU channels back to the UK) are estimated at £4,445,000,000, giving what might be called a total deficit of £8,473,000,000. H. M. Treasury, European Union Finances 2015

Predictably, the ‘leave’ campaigners like to quote the gross contribution (sometimes not even allowing for the rebate) and the ‘remain’ campaigners like to quote the net contribution after deduction of both the rebate negotiated by Margaret Thatcher and public sector receipts. To ignore the rebate is to completely distort the situation, but to simply quote the net figure after allowing for public sector receipts is also misleading, I think. Money sent back to this country is used for many things which our own citizens may not approve of, including the money which the EU spends to promote itself. It also engenders a culture of dependence on the EU. It is noticeable that many British farmers are inclined to stay in the EU because the EU is the source of their subsidies, ignoring the fact that the UK Government subsidised farmers long before we were in the EU. This is a powerful argument for the UK Government’s ‘remain’ campaign because the ‘leave’ campaigners, not being in power themselves, cannot promise that they will subsidise farmers in a similar manner. It is at least arguable that the EU is using our money to bribe us to stay in the EU. If we do remain within the fold, will they bribe others to remain with our money?

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