Peter Bone MP has just circulated figures from the OBR to remind us of the large leap in the costs of our contributions to the EU. At a time when government talks about the need for budget restraints the UK faces a 116% increase in its net contributions to the EU, comparing 2010-15 with the five preceding years. Net contributions are the amount we pay in ,less the rebate, less the money we get back as EU spending.
Over the five year period gross contributions are forecast to rise by 8%, but net contributions more than double. This shows just what an expensive folly it was on the part of Mr Blair to surrender part of the UK’s very valuable rebate won by Margaret Thatcher. He did so in return for the promise that they would reform the Common Agrilcutural Policy in a way which lower its costs substantially. There is not much sign of that happening. The loss of abatement works out at around £2 billion a year of extra cost once if is fully phased in. This means they are also forecasting reduced EU spending in the UK relative to contributions.
Many of my constituents and correspondents do not feel we are getting value for the £41 billion the OBR says we will have to pay into the EU over the next five years. At a time of budget restraint people will naturally become very critical of such indulgence.
We read that Mr Barroso has told Mr Cameron he has to choose between protecting the city and having influence at the top table. That should not be the choice at all. The UK PM should simply defend the UK interest. The UK interest is not to help Euroland preside over its disaster or seek to influence their ill fated scheme, but to get us out from as much of the collateral damage as possible.
Over the last five Labour years gross expenditure was £12.4bn, £12.5 bn, £12.7bn, £14.1 bn and £9.5 bn.
The OBR forecast for 2010-11 onwards is £12.3 bn, £13.3bn, £12.8bn, £13.6bn. and £14.3 bn
The net figures for the last Labour years are £3.9bn, £4.6bn, £3.3bn, £2.5 bn, and £4.7 bn
The net forecasts are £7.6bn, £8.5 bn, £7.7bn, £8.3 bn and £ 8.9bn
There are other figures released by the ONS this week that have also attracted attention. These show that the 2010 figure shot up to £7.4 billion net and rose to £13 bn gross after abatement. If you extrapolate these figures you can up with a bigger headline than £41 billion for the five years.
It is also important to distinguish between the abatement which is a good thing because you get cash back, and the EU spending which is also taken off the gross contribution. This is far less satisfactory, as the spending may not offer good value or be on things you want to spend on. Taxpayers have to pay the gross bill, after the abatement. It still needs higher taxes to pay for the EU spending.
I have always wanted to start deficit reduction with big cuts in EU budgets. It’s a pity such a popular policy is ruled out by the undemocratic constitution of the EU.