Top of page.

Newcastle upon Tyne Liberal Democrats

We store cookies on your device to make sure we give you the best experience on this website. I'm fine with this - Turn cookies off

The UK’s contribution to the EU budget in perspective

November 25, 2014 10:10 AM
By Kevin Hannon, Chairman of the European Movement Midlands branc in

As a result of 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, wealthier-than-first-thought UK has been asked to pay its proper contribution. At the same time, the EU's auditors have approved its accounts for last year.

The so-called (by a Prime Minister trying to out-UKIP UKIP) "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, and could fund UK government expenditure for 20 hours.

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 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 just on interest payment. 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%, one hundredth 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 the US, UK and other EU economies, 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 each. 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 10%, 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. Although there was a great deal of variation, from a minimum of 3 pence each in 2008 to a maximum of 30 pence in 2013. During that period the contribution of France, with a population almost the same as the UK, was 20% higher than that of the UK.

The additional budget contribution asked of the UK will raise our contribution for one year from 30 pence per person to 37 pence, and will raise our average contribution for the years 2007 to 2013 to £4.1 billion; up from 17 pence per inhabitant per day to 18 pence.

Putting the £1.67 billion EU contribution into perspective and context to show the real scale of the economic issue makes clear that our Prime Minister, 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.

This is an edited version of an article first posted by European Movement on 10/11/14