Still Paying For The EU

SATURDAY, OCTOBER 30, 2010

Still Paying For The EU

Following Mr Cam's, ahem, "triumph" in holding the EU budget increase to a mere 2.9% next year, we thought we'd remind ourselves just how much we've paid in since we joined in 1973.

Because the numbers can get very confusing. All kinds of different definitions of gross and net - pre and post-rebate - get chucked around, often in a deliberate attempt to confuse us.

So let's remember the key points.

Our gross contribution to the EU budget comprises a number of different elements, including revenue from tariffs imposed on goods imported from outside the EU, and a share of VAT receipts. The most important element by far is a pro rata charge based on our share of EU gross "national" income. Currently the overall total is running in the range £12-14bn pa.

Fortunately, up until now we have not had to pay the full amount implied by those rules. And that's because of the rebate negotiated for us by the blessed St Mags back in the 80s.

So what we need to look at is our gross contribution net of those rebates, and that's what's shown in the chart above (the data sources are here andhere).

As we can see, in the latest completed year, 2009, we handed over £7.8bn, around £300 for every British family. In real inflation adjusted terms, that compares to a cost of £1.6bn in our first year of membership. So in real terms the costs have increased almost fivefold since we first joined.

And over the entire period of our membership, we have paid total membership fees of £170bn, which is £257bn at 2009 prices. And that is a little over £10 grand per family.

Now it is true that some of this cash comes back again in the form of EU spending in the UK. For example, around £4bn goes on subsidising our old friends the farmers (or "the preservation and management of natural resources" as the EU now prefers to call it - see here). But in terms of the burden on UK taxpayers, that is immaterial - we are paying taxes to fund programmes of the EU's choosing, not ours (farming subsidies would not be high on Tyler's list of worthy spending projects).

Moreover, the cost of our EU budget contributions is only one element of the overall cost of EU membership. In particular, we also need to add in the £5bn+ pa it costs us through paying food prices much higher than the world market. And here's Jamie Oliveoil to remind us just how that works (and see this blog):