What does the UK pay for the EU?

 

          Lee Rotherham’s latest publication “The EU in a nutshell” (Harriman House) is an excellent guide to the history, costs and law making of the EU. He sent me a copy of it to review on this site, which I am happy to do. 

         From the opening remarks of David Starkey, reminding us of England’s history seeking independence and distance from the continental powers, to the country by country guide, it is packed with useful information.It could, for example, be a useful source book for trying to answer the crucial question ,what are the costs and benefits of UK membership?

       The UK’s total payments into the Union, after deducting the rebate, amount to a mighty £170 billion so far. We have also paid more for our food, though have benefitted from some tariff reductions on other products.  A Treasury study under the last government is said to have concluded that the total costs of EU membership amounted to a massive 28% of UK GDP. This comes from adding 7% costs of EU protectionism, to 6% costs of overregulation, to 3% transatlantic barriers to trade, to 12% being  the EU’s competitive gap with the USA. This combines imposed costs with missed opportunities and can be criticised for that. It is however, undeniable that the extra costs of EU regulation and protectionism are real, and limit our ability to compete with the rest of the world.  

        We have run a large balance of payments deficit during our years of membership with the rest of the EU, whilst often running a trade surplus with the rest of the world despite the extra costs and regulations imposed on that trade by the EU.

        The book also charts the rise of EU powers and law making. It demonstrates just how many different views have been expressed by the various authorities over how much law is now EU derived. All the figures point to it being an important amount, and some suggest it is the large majority in many areas.  It analyses the viewpoints of the differing countries, and stresses just how different the balance of costs and benefits are for the various states of the Union.

        If you want to be reminded of how the Euro came about, know how voluminous the law codes or or just browse through the vast array of EU institutions and quangos, this book is for you. You will not find much evidence of benefits to the UK,  but I do not suppose that will surprise most of you.

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38 Comments

  1. Mike Stallard
    Posted July 28, 2012 at 6:04 am | Permalink

    I bought that book and have used it too. It isn’t the good read I thought it was going to be. I suspected it was going to be another Christopher Booker type history.
    It is a perfect coffee table book which you can dip into and see what you want. Every now and then there is a fair and trenchant comment. The rest is all facts presented quite often as lists.
    It is like looking at a skeleton.
    But, let us face it: the EU is chronically boring and it is meant to be that. So far the plan has worked too: nobody is interested as our rights, our law, our parliament and our Queen have all been downgraded by Berlaymont.

  2. Brian Taylor
    Posted July 28, 2012 at 6:05 am | Permalink

    Thank you again for this blog, would you, with your knowledge of Westminster and the civil service please tell us how and who will get us out of the EU.

    • Timaction
      Posted July 28, 2012 at 6:33 am | Permalink

      Everyone except the political class wants out of the undemocratic monster of the EU. It will happen. Its just whether the mainstream parties aline with public opinion or we vote for UKIP to implement our will. The time has come and we will no longer tolerate the lies from political leaders of all the mainstream. We’ll get the usual trade and 3 million jobs at risk rubbish. With that £50 billion trade annual deficit with the EU I’d be happy to renegotiate our trading treaty ONLY with them. The difference between me and your leader Mr Redwood is I wouldn’t concede my position of never leaving the EU BEFORE negotiations. This is known as the “Brownian” position of telling the markets we’re about to sell our gold reserves!!

    • Bob
      Posted July 28, 2012 at 8:54 am | Permalink

      The only hope is UKIP.

      • Posted July 29, 2012 at 6:32 am | Permalink

        But that is not hope what soever with the current voting system.

    • Derek Buxton
      Posted July 28, 2012 at 10:29 am | Permalink

      Oh how I wish someone would. But it is not going to happen, too many politicians and civil servants are in favour of everything the EU says and does. The other problem is that, as our own politicians have consistently lied to us from the start, most people just do not understand how it affects their lives. And of course it is boring, just as was intended when Salter and Monnet first came up with the idea of a single European state.

    • OGGA1
      Posted July 28, 2012 at 3:25 pm | Permalink

      Hello Brian Taylor,
      May i suggest that the so called eurosceptics leaving government and joining
      UKIP would be a big help.

      • Posted July 29, 2012 at 9:07 pm | Permalink

        They cannot ever win with the current UK voting system to many always have always will non thinking voters.

  3. Posted July 28, 2012 at 6:57 am | Permalink

    28% down in GDP sounds about right to me. The inability to pick and choose who come in and out, who to fund through university, how to generate our energy, the soft loans to the PIGIS, sill boilers and building regs also imposes a huge cost.

    It can clearly be seen in the greater success of comparable countries that are outside the EU.

    Still Cameron does not want to be a “Greater Switzerland” (though he has not given any sensible, or even other reason, as usual just the vague phrase) and will never campaign to leave – however much more oppressive and undemocratic it becomes.

    I see Cameron and Osborne are described by as “tacticians” rather than “strategists” by Lord Ryder, the former chief whip under the appalling John Major. He seems to me to be neither. The only strategy he uses with success was to lie about being a EU sceptic and Tory in order to be elected leader. He then let Clegg have equal TV billing and campaigned on a socialist pro EU agenda and lost. His other tactic of employing people, clearly out of their depth like Baroness Warsi as chairman has not worked very well I see. Though they seemed to have managed to let her off with a slap on the wrist.

    • Posted July 28, 2012 at 7:18 am | Permalink

      The book sounds like rather depressing reading – especially with Cameron for 3 more years then Labour for 5. Perhaps best just to leave the UK for perhaps Switzerland or Norway, New Zealand or similar.

      I wonder if anyone will ever get a reason out of Cameron for his irrational aversion to the richer, less crime ridden, trade and fiscal surplus, strong currency, happier & healthier Swiss model – is it the yodeling perhaps?

      • zorro
        Posted July 28, 2012 at 5:11 pm | Permalink

        He dislikes Switzerland because it is far more democratic and free than here or anywhere within the EU. It also is not in the EU, so is therefore a natural attraction to his antipathy.

        zorro

        • Posted July 29, 2012 at 6:34 am | Permalink

          It must indeed be that – Perhaps he should say so then – But somehow I do not think he will.

  4. A.Sedgwick
    Posted July 28, 2012 at 7:33 am | Permalink

    Thank you for the advice – just ordered a copy and no doubt will not be surprised by its findings.

  5. Brian Tomkinson
    Posted July 28, 2012 at 8:17 am | Permalink

    Is this the EU which is so loved by Cameron and prompted him to say : “I don’t believe leaving the EU would be best for Britain ” ? I doubt that he will have any inclination to read the book. He certainly isn’t intereseted in the views of the British people on our EU membership as he has already made clear.

  6. Disaffected
    Posted July 28, 2012 at 8:21 am | Permalink

    Businesses deal with businesses not countries with countries. Therefore if the Uk leaves the EU it will not stop business seeking ways to make profit in selling their goods, it will not stop people buying goods they want. Leaving the EU will make our businesses more competitive as you highlight.

    Liam Fox the Uk should not fear leaving the EU, it should be rubbing its hands with delight as it unshackles the financial burden.

    The truth is no one knows the exact costs because some are hidden ie mass immigration and the drain on our public services and welfare state. We already had Mr Grayling and IDS writing a joint letter to say that over 370,000 migrant workers are now in receipt of benefits. I suggest they are deported as they add no value. It would not be tolerated in other western economies ie the US or Australia.

  7. Michael Withers
    Posted July 28, 2012 at 9:51 am | Permalink

    I suspect you will not get an answer, simply because there isn’t one.

  8. Doppel
    Posted July 28, 2012 at 10:12 am | Permalink

    Is there any idea what the annual economic cost to the UK is?

  9. Electro-Kevin
    Posted July 28, 2012 at 11:19 am | Permalink

    Should we care even if the EU made us rich ?

    What sort of people would sell freedoms fought for with the blood, pain and grief of their living ancestors ?

    As it is we are not even selling but BUYING the right to give away those freedoms at huge monetary cost.

    Madness.

    • cosmic
      Posted July 28, 2012 at 10:55 pm | Permalink

      Exactly.

      The EU is a political project and the intention is to create a pure bureaucracy; rule by officials. The accepted political processes are kept on as a toothless sideshow. It assumes a class of incorruptible technocrats appointed on merit. We have seen that this is an unsafe assumption.

      Participating in an experiment of this sort cannot be decided on temporary economic considerations. Such a scheme of government is unlikely to provide lasting economic success anyway. Whatever happened to the Lisbon Accord, which was going to turn the EU into a high tech powerhouse?

      I dislike this term EUSSR, but it certainly bears a resemblance to big state experiments which we saw in the 20th Century, which didn’t work and which caused immense misery.

      The EU has almost always been spoken of in purely economic terms and I suggest this is at best a distraction. Perhaps the clearest example is the Euro, passed off as a economic measure, but clearly a political manoeuvre to force a closer union by engineering a predictable crisis through which to manipulate into being that which could not be done by seeking consent.

  10. David Langley
    Posted July 28, 2012 at 2:09 pm | Permalink

    Have you formed any opinions regarding our next step John. Is the EU not also having a “Chilling Effect” on our morale and our ability to think for ourselves.

  11. Denis Cooper
    Posted July 28, 2012 at 3:07 pm | Permalink

    A study on behalf of the Institute of Economic Affairs back in the late 1990’s, and then updated in 2001, came to the conclusion that the net economic effects of EU membership were so small that they could be considered more or less neutral.

    http://www.iea.org.uk/in-the-media/press-release/economic-effects-of-eu-membership-marginal

    “Whether there is a net cost or a net benefit from membership is uncertain but, whichever it is, it is likely to be less than 1 per cent of gross domestic product.”

    So that would now be less than about £15 billion one way or the other.

    But later studies have come out with higher and higher estimates for the net cost, and as far as I’m aware none have claimed a net economic benefit.

    I’m sceptical about the highest numbers – a cost equivalent to 28% of GDP, over £400 billion a year, seems unlikely to be true, and even if it was it would take a long time to reverse the effects of four decades of lost opportunities – but I find it quite plausible that the costs are now in the £150 billion a year ballpark.

    As for the number of laws imposed from Brussels, as a purist my answer is that whether it’s now half of all new laws, or more or less than half, our national sovereignty demands that there should be none at all, and there wouldn’t be if we could exercise a veto in all cases.

    In fact when the government’s pamphlet urging a “yes” vote in the 1975 referendum stated:

    http://www.harvard-digital.co.uk/euro/pamphlet.htm

    “No important new policy can be decided in Brussels or anywhere else without the consent of a British Minister answerable to a British Government and British Parliament”

    “The Minister representing Britain can veto any proposal for a new law or a new tax if he considers it to be against British interests.”

    that was already not entirely true even at that time; and of course since then successive governments have surrendered our national veto in more and more cases, in each of which we are now made subject to majority votes.

    • Chris
      Posted July 28, 2012 at 6:13 pm | Permalink

      Extremely helpful. Thank you.

    • uanime5
      Posted July 29, 2012 at 6:53 pm | Permalink

      1) Any treaty has to be approved by the British Prime Minister and had to be ratified by Parliament.

      2) The Prime Minister is part of the European Council which allows they to voice opposition to laws and veto any laws they don’t like.

      3) The “Minister representing Britain” is either a minister for a particular department on the European Council of the UK’s European Commissioner. Both of which can veto laws.

      Had you done even basic research regarding how the EU is run you wouldn’t have made this mistake.

  12. zorro
    Posted July 28, 2012 at 3:11 pm | Permalink

    ‘You will not find much evidence of benefits to the UK, but I do not suppose that will surprise most of you.’…….Well someone in the UK must benefit from this arrangement….Perhaps it might be the politicians?

    zorro

    • Posted July 29, 2012 at 6:50 am | Permalink

      Politicians and some in the state sector and some lawyers benefit from the additional court levels and additional ambiguity, delays and uncertainty thus created. Perhaps some large companies can gain by the small ones being put out of business by over regulation.

      Everyone else loses and loses far more overall than the parasitic gainers above.

  13. fkc
    Posted July 28, 2012 at 3:22 pm | Permalink

    I second Brian Taylor’s comments. Please Please tell us how we can rid ourselves of this EU milltsone. I feel the more we ignore the ever increasing encroachments on our democracy the more difficult it will become to leaved the EU. Can whatever is needed be put in place soon and swiftly.

  14. Posted July 28, 2012 at 3:43 pm | Permalink

    you have for some time battled away with the ‘lets have a few sweeties back ”argument in what i think was a realisation on your part that that was about all one could expect with the balance of opinion in the house of parliament and its party make up.
    however as spain and the rest sink into financial ignominy from the failed delors attempt to create a united states of europe which has so far only benefitted the german car industry i hope you will become more foreceful in the ”better off out camp” as that gains strength.
    if i was in partnership with a business that was constsntly losing money and heading towards potential bankruptcy i would sooner rather than later say ”enough is enough” and pull the plug and cut my losses.

  15. uanime5
    Posted July 28, 2012 at 3:59 pm | Permalink

    We run a trade surplus with the rest of the world because we buy so little from them as most countries don’t produce anything the UK needs. Were the UK to buy less from the EU we would have a trade surplus with them as well.

    • Sean O'Hare
      Posted July 28, 2012 at 4:22 pm | Permalink

      Piffle! There is nothing produced in the EU that could not be resourced elsewhere. An upmarket Lexus is as good as a BMW any day and French wines aren’t all that great compared with South American wines. About the only thing I can think of that probably could be resourced outside the EU is retsina! Oh I would miss that terribly!

      • Lindsay McDougall
        Posted July 29, 2012 at 6:18 pm | Permalink

        Where do you get Retsina from these days? I don’t see it in off licenses or supermarkets but admittedly my wife does most of the shopping.

      • uanime5
        Posted July 29, 2012 at 6:56 pm | Permalink

        It doesn’t matter whether the UK buys from the EU or a non-EU country. As long as the UK is a net importer we won’t have a trade surplus.

    • Posted July 29, 2012 at 6:53 am | Permalink

      What a load of …………

      Just look at where most thinks we buy come from or are manufactured at least.

      • uanime5
        Posted July 29, 2012 at 7:03 pm | Permalink

        Well according to the CIA 51.5% percentage of UK imports come from the following 7 countries:

        Germany 13.2%,
        China 8.7%
        Netherlands 7.5%
        US 6.1%
        France 6%
        Norway 5%
        Belgium 5%

        So it’s quite easy to find where things come from.

  16. Mark
    Posted July 28, 2012 at 8:08 pm | Permalink

    Has anyone given a copy to Mr. Hague? It might inform his own review.

  17. Derek Emery
    Posted July 29, 2012 at 6:14 am | Permalink

    It’s interesting that left liberal countries and states tend to live beyond their means with booming public sectors. This includes the US, UK, and EU. I include the UK simply because there is virtually no difference between Labour’s and the Coalition’s public debt policies. See “The 5 Myths about the UK economy it suits everyone to perpetuate” http://www.libdemvoice.org/five-myths-about-the-uk-economy-28997.html.

    People are driven by the 5 moral triggers and the liberal brain only cares about harm/care so the liberal brain has only one candle alight out of the possible 5. See “Why can’t we all just get along” at Live Science http://www.livescience.com/6329-.html

    The left liberal mind is not terribly interested in the fate of the private sector. Obama recently was critical of small business owners because their emphasis was on performance and not on working together. Hollande is only interested in increasing public sector jobs. I suspect this is because private business is a based on competing with others rather than working together so in the antithesis of the Liberal drive for equality and working together.

    Mervyn King recently admitted that it was the combination of political and regulatory failure that lead to the banking crisis. The EU elite will never admit that the EU economic failure stems directly from their own failure of creating a eurozone that could not possibly work in the form they designed it.

    This is because the political mind suffers from biased perception of facts i.e. finds confirmatory evidence in support of already existing beliefs and ignores or reinterprets all disconfirming evidence to fit beliefs. Instead they blame the banks and the markets, exactly as left liberals do in the UK.

    The EU is a left liberal project where all policies are created by unelected left liberal minds. The one candlepower mind’s approach is not going to create as successful a society as a 3-5 candlepower approach. Too many relevant human dimensions are ignored. More candlepower is needed to appreciate the value of competition which is the driver for the private sector.

    The EU has always been low growth because of its limited political approach. Now much of the world has caught up and will proceed to surpass the EU so that in a decade or so the EU will be obviously economically and technically behind. Another factor is the globalized world economy which means that money and jobs will relocate wherever in the world it is best.

    The new EU banking regulations will reduce GDP growth as will the Eurozone market reform. The EU is implementing an expensive energy policy which will cause companies to locate outside the EU. Since these negative effects fall largely on the private sector there is no real interest by the EU elite.

    The EU is taking the necessary decisions towards becoming a future economic backwater. This will mean that the UK balance of trade will change drastically over the next decade. Companies will invest where there is growth for their products and services rather than where there is little or no growth. I suspect in a decade’s time trade to the rest of the world will be up to double that with the EU.

  18. Lindsay McDougall
    Posted July 29, 2012 at 1:38 pm | Permalink

    I find the Continual interference in our law making and our internal and foreign affairs much more hateful that the mere financial losses, upsetting though these are. Every time I hear the words “By a decision of the European Court” a red mist descends. If you also bear in mind that we have been consistently lied to on our road to serfdom, the situation has become intolerable.

    I appeal to Mr Redwood and other Euro sceptics in parliament to rise up in revolt. You say that Europe is only third on the electorate’s list of priorities, after the economy and immigration. You can change these priorities by campaigning more on Europe, and you can point out the effects of EU treaties on our economy and on immigration. Insist on the right European policies in the next Conservative manifesto, campaign for a purge of Europhile candidates and tell Mr Cameron in the House of Commons in open session what your expectations are.

    A summary of Mr Rotherham’s book should be published as a pamphlet, issued from Conservative Central Office (or otherwise if this is blocked).

  19. Paul
    Posted July 29, 2012 at 8:01 pm | Permalink

    Your numerous blogs on the EU always make interesting reading and hopefully in some way contribute to the rise of UKIP. It’s a pity a few of the senior eurosceptic figures in the Tory party, including yourself, have not wised up yet and abandoned the hopeless Conservative Party and joined the only party speaking up for the country right now.

    • Jon Burgess
      Posted July 31, 2012 at 12:00 pm | Permalink

      Sadly there doesn’t appear to be any Statesmen/women in parliament; just a load of party activists and careerists with little or no interest in the views of the people, or our long history of freedom and independence.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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