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Putting the UK's contribution to the EU budget in perspective

November 11, 2014 1:26 PM

Thanks to Kevin Hannon, Chairman of the European Movement Midlands branch, for giving us the facts:


Mr Cameron is appalled at the "vast" amount as he called it being asked of the UK as its extra contribution to the EU. This comes from a re-assessment of the statistics of the size of the economies of all the EU countries; which they had agreed some years ago to do.

The "vast" amount requested of the UK is 2.1 billion euros, which is £1.67 billion at the present exchange rate. It is about a thousandth of UK GDP for this year. Our government will be spending 440 times a "vast" amount this year. UK government expenditure for 2014 is expected to be about £730 billion, which is £2 billion per day, so £1.67 billion would not even pay for a full day of government spending.

Of that expenditure of £730 billion about £46 billion, £126 million per day, is interest on the national debt; which comes to £2 per day per inhabitant. And the size of our daily payment to the EU? In 2013 UK net contribution to the EU budget was 8.64 billion euros, which was £6.9 billion, which works out at 30 pence per day per person. About a seventh of the cost of interest payments, and a mere 1% of government spending.

Compare that with what we get back. According to a CBI report "the net benefit arising from EU membership is somewhere in the region of 4-5% of UK GDP or between £62bn and £78bn per year. This suggests that households benefit from EU membership to the tune of nearly £3,000 a year - with every individual in the UK around £1,225 better off."

In the 7 years since the financial crisis hit, UK government borrowing has soared from £500 billion, 35% of GDP, to almost £1300 billion, 75% of GDP. UK debt per inhabitant has risen from about £8,000 to £20,000. And it is still rising at about 4-5% of GDP per year. Total interest on UK national debt during the 7 years 2007 to 2013 came to about £260 billion. And our contribution to the EU budget during those 7 years? £27 billion, about one tenth of the cost of interest on the national debt.

The average annual UK net contribution to the EU budget during 2007 to 2013 was £3.86 billion; which comes to 17 pence per person per day. During that period the contribution of France, with a population almost the same as the UK, was 20% higher than that of the UK.

Putting the £1.67 billion EU contribution into perspective and context to show the real scale of the economic issue makes clear that Mr Cameron has a strange notion of what is "vast". Maybe his Chancellor has not told him about some vast UK and EU economic realities. Or perhaps Mr Cameron has other matters he thinks vastly more important than good relations with the EU. Perhaps his theatrical opposition to paying to the EU what is a trivial amount relative to the size of the UK economy and government spending is because he cares more about winning a by-election and holding his party together than he does about the future well-being and economic security of the UK.