The EU wants to hang on to our money

The UK is the EU’s Treasure Island. We run a £92bn current account deficit with them ( year to Q3 2016). That includes a huge deficit on trade in goods which come in tariff free to their advantage. It includes £7bn of annual remittances by EU citizens living in the UK but sending money back to their home countries from good jobs here.

The UK has lent the rest of the EU £1.4 trillion through the London banking system. We pay around £700 million more to them each year for UK citizens to use their health services than they pay to use the NHS here.

We pay a gross budget contribution of £17.7 bn  or £10.8 bn after rebate and payments back to the UK state.

I will be looking in more detail at the financial flows going from the UK to the rest of the EU in later blogs. The overall magnitude of our financing of the EU is the main reason they do not want us to leave without first demanding we carry on paying as if we were staying.

If they decided to be decent and sensible they would of course find it easier to keep hold of much of this money. London banks will be very willing to lend more if they can trade sensibly with the continent. If the Commission and Germany agree with the UK proposal that all EU nationals located in each others countries can stay the remittances will continue. If they want tariff free trade they will doubtless continue to sell us more than we sell them.

Meanwhile leaving must mean ending our budget contributions. That should not be part of any negotiations.

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84 Comments

  1. Lifelogic
    Posted January 15, 2017 at 7:44 am | Permalink

    Exactly, but can we please finally just get on with it and stop all this pointless delay and dithering.

    On Tuesday we will get another speech from Theresa, but will she actually say anything beyond the vague and the blindingly obvious? It might make a pleasant change. She so rarely says anything substantive and when she does it has mainly been misguided red tape or even larger state interventionism, or as with Grammar schools, sensible but unlikely to be delivered.

    If the government really do give the go ahead to the Swansea lagoon is will be clear proof that they are totally incompetent and are unable to do even basic sums. The trivial amount of power it will deliver (about 48 mega watts average) will not even be on demand power and yet they expect to sell it for three times the current cost of on demand gas generated power due to the damaging green loon market distortions. It will be hugely damaging to UK productivity and our ability to compete.

    Also to this governments reputation or what is has left of it.

    • Sir Joe Soap
      Posted January 15, 2017 at 9:04 am | Permalink

      May might.
      (Keeping posts short and to the point).

    • bratwurst
      Posted January 15, 2017 at 9:22 am | Permalink

      May has always been specific – she wants us to remain “within” the Single Market. If she means it the only way currently to achieve this is by re-joining EFTA.
      Many will not like this but it will give her the ‘red lines’ she needs – out from under the ECJ, control of EU immigration, ability to negotiate trade deals.

      • Denis Cooper
        Posted January 16, 2017 at 10:18 am | Permalink

        She wants UK companies to be able to operate within the EU single market, which is not the same as the UK being a member of the single market. The US is not a member of the single market but US companies still manage to operate within it as well as selling into it.

        As pointed out below we cannot re-join the EFTA we left in 1973 because it no longer exists as it was when we left it, and it would not satisfy two out of the three criteria you mention.

        • getahead
          Posted January 16, 2017 at 2:40 pm | Permalink

          The term ‘within’ is ambiguous. If she means access why doesn’t she say access. Or is the ambiguity deliberate? Perhaps we’ll find out tomorrow.

    • turboterrier
      Posted January 15, 2017 at 9:45 am | Permalink

      @ Lifelogic
      If the government really do give the go ahead to the Swansea lagoon is will be clear proof that they are totally incompetent and are unable to do even basic sums.

      Regarding the whole mess of coming up with a renewable energy plan and the wasted billions kindly paid out by the consumers industrial as well as domestic to the benefit of a very small number of people except the investors of all this green crap. Sadly supported by a very large majority of the elected members of Westminster who have little or no understanding bordering on ignorance of what they have voted for at our expense. It is not a crime to be ignorant but it is a crime to show it. The 100 odd MPs who have been relegated to the bank benches for their beliefs in their very researched knowledge that they try to raise in the house must despair at the projects being considered at this time.

      What reputation?

      • Lifelogic
        Posted January 15, 2017 at 6:10 pm | Permalink

        In June 2008 only five members of the House of Commons voted against the bonkers Climate Change Act.

    • graham1946
      Posted January 15, 2017 at 10:39 am | Permalink

      Hear, hear.

      Mrs. May is outwardly very calm and reassuring and looks like she knows what she is doing, but seems to lack any kind of vision or get up and go.

      Her record on immigration in 6 years at the Home office just got worse every year despite her reassurances and ministrations and is perhaps a better indication of her ability than any warm words and lofty speeches about the JAMs (who are being hit with big Council Tax rises within 6 months of her pledge to help them).

      • Hope
        Posted January 15, 2017 at 8:35 pm | Permalink

        May has an appalling record as Home Secretary. Why should her performance change as PM? She lied, control over our borders, to scare us into remaining in the EU, why trust her now?

      • Lifelogic
        Posted January 15, 2017 at 8:55 pm | Permalink

        Exactly. We really do care about the JAMs, so we will hit them with a huge council tax rise! Are there many politicians who do not lie endlessly are are not complete hypocrites?

        Perhaps 10% I suppose?

        I rather tend to prefer engineers and scientists myself.

      • zorro
        Posted January 15, 2017 at 10:55 pm | Permalink

        ‘but seems to lack any kind of vision or get up and go’…… It’s called ‘low energy’ 😉

        zorro

    • Tad Davison
      Posted January 15, 2017 at 11:37 am | Permalink

      LL,

      Just imagine if the UK were not so quick and eager to follow the Neo-con war-like agenda in Washington, and had friendly relations with Russia who have truly massive supplies of gas and oil they wish to sell. We could finally ditch this ludicrous dear energy policy that has hampered us for so long, and power our homes and industry for decades to come. In turn, the Russians would then have the money to buy British goods and services.

      That scenario would greatly improve the lives of ordinary people from both Russia and the UK and seems to be the way to go, with a mutually beneficial bi-lateral relationship with a country without whose sacrifices in World War Two, we in the UK would probably now be talking German.

      Seen in that light, I venture we could well do without entanglements with so-called allies who do not share our best interest.

      Tad

      • Hope
        Posted January 15, 2017 at 8:41 pm | Permalink

        Ted, funny is it not that Putin is accused of interfering in elections without evidence and is condemned. Obama interfered with our EU referendum and was supported by our PM Cameron and his side kick. The U.K. And US interfering in self determination of so many countries, Iran,Iraq, Lybia but we are expected to think this is okay despite the devastation it has caused to these countries and consequently our own! Now as Merkel leads the way East into the Ukraine frighteningly she is now demanding an EU army! The EU led by Merkel is a threat to world peace and understandably likely to stir up the Russians.

      • Lifelogic
        Posted January 15, 2017 at 8:56 pm | Permalink

        Indeed.

    • Duyfken
      Posted January 15, 2017 at 11:51 am | Permalink

      I do agree with you Ll, in that May has tried our patience for far too long. Nevertheless, I am still withholding judgment – until the end of March. If she were to deliver punctually and as promised, then great, but if there is any back-sliding let’s all join UKIP!

    • zorro
      Posted January 15, 2017 at 12:19 pm | Permalink

      Yes, enough of the dithering…… Remainers will never accept the result – too bad. To be honest, I’ve had enough of their bleating and pathetic ‘I am 48%’ and ‘Very Brexit Problems’ nonsense. The British made a firm decision to leave the EU, and as I have had to make do with a system I dislike for the last 40 years so will they. They may even have more opportunities too if they take their blinkers off! We need to move quickly and decisively for the good of the country….. If T May feels that she cannot do this, then she should follow Cameron’s lead.

      zorro

      • Lifelogic
        Posted January 15, 2017 at 6:14 pm | Permalink

        It would have been more like 2 to 1 for leave, had the pitch been level, without project fear, without the absurd BBC and state sector bias, without the propaganda leaflet and had Cameron and the Tories recommended leave. As he clearly should have done given his pathetic “deal”.

    • Chris
      Posted January 15, 2017 at 12:50 pm | Permalink

      I am very worried by what has been trailed. Apparently Theresa May will say that we will leave the single market if immigration curbs can’t be introduced. The question arises “What if the EU offer concessions maybe for some point in the future – will she regard that as good enough?”. My answer is a definitive NO. I and millions of others voted to leave the single market.

      Then we have Philip Hammond reportedly saying that we are accepting the European economic and social model. Really? I thought we had rejected it. We voted not to be tied to the stagnating economic bloc that is the EU, with high unemployment e.g. youth unemployment of approx 50% in Spain and Greece. We also rejected the multiculturalism mass immigration doctrine of the EU with its emphasis on destroying the nation state and sovereignty.

      What is wrong with these people? I assume it is because the majority of MPs are Europhiles, with also a very significant proportion of Tory MPs also. What is more they are in positions of real power and influence e.g. the PM, the Chancellor and many others. Added to that the vocal Soubrys and Morgans of this world.

      This really does seem to be a fight for democracy, with the political elite seemingly intent on making sure it does not succeed.

  2. alan jutson
    Posted January 15, 2017 at 8:02 am | Permalink

    Absolutely agree with you John, LEAVE means leaving with no financial contributions or payments to the EU still in force.

    Immigrants have always sent money back to their Mother Countries so that will not change, but the fact is it is money that does not circulate in the UK, does not help the UK economy, because if it does not circulate here, it does not help the creation/expansion and turnover for home business, and because it does not circulate, no tax is raised on its spending here.

    So whilst people will not stop sending money to their homelands at least the government can stop sending benefits out of this Country, other than paid for pensions of its past citizens who have made contributions.

    Foreign aid of this sort (recently reported) should of course also stop.

    • alan jutson
      Posted January 15, 2017 at 7:05 pm | Permalink

      I see Mr Hammond has at last shown some positive spirit in his latest comments to the Media with regards to the EU about access to the so called single market.

      Not before time, and long may it continue, as we have to show the EU we will not just stand around to be kicked around, and to simply take it without a response.

      If they want to play hardball instead of Co-operation, we can as well, it cuts both ways.

  3. Caterpillar
    Posted January 15, 2017 at 8:23 am | Permalink

    Well it does look like the EU could be paying a contribution to the UK so that it can maintain free access to the UK market and efficient UK based financing. Perhaps the “sign” of budget contributions should be part of the negotiation.

  4. Original Richard
    Posted January 15, 2017 at 8:38 am | Permalink

    Many thanks for these figures.

    I did not realise that the remittances sent by EU citizens back to their home countries or the difference on healthcare payments were so large.

    • Alexis
      Posted January 15, 2017 at 7:52 pm | Permalink

      Nor did I.

      I knew money was being sent out of the country – and was therefore lost to our economy – but did not know we could put a figure on it. Let alone such a large one.

      Does that include the child benefit for non-resident children?

      This has been described as a ‘drop in the ocean’ – rather insulting to hard pressed taxpayers who have to fund it.

  5. Prigger
    Posted January 15, 2017 at 9:00 am | Permalink

    These figures will be seen as written on the side of a bus. Thus will be Remoaner comment.

    Headlines: Mrs May will say Tuesday we may… exit of the Single Market. Cameron and Osborne said definitely. We voted for exit of all.
    She is good at treading water.

    • Lifelogic
      Posted January 15, 2017 at 6:16 pm | Permalink

      Then she will probably drown. We need leadership not more interventionist, socialist dithering.

  6. Fred
    Posted January 15, 2017 at 9:05 am | Permalink

    The UK cash cow is the reason Brussels is so willing to fund (bribe) any organisation that will support them, the BBC springs to mind immediately. Clearly the EU is a total disaster for Britain and equally clearly any supporter of it is either deluded or bought and paid for.

  7. E.S Tablishment
    Posted January 15, 2017 at 9:19 am | Permalink

    The habitat of Remainers is almost exclusively in Party membership.

    Normal people only say they are Leavers/Remainers to satisfy pollster Either/Or-questions.

    MPs in Parliament and Councillors in Councils saying they are part of group, after 23rd June 2016, called Remainers, are traitors to our way of life, a severe and continual threat to our democracy and electoral system. The democratic vote was Leave.

  8. Wilson
    Posted January 15, 2017 at 9:37 am | Permalink

    Those companies facilitating the exit of money from our country by foreign workers hopefully will be taxed much more on our exit of the EU or a direct tax on the persons sending the money or both.

    The UK of the late PM Wilson’s government in the 1960s lamented the brain drain.But took measures restricting individual export of capital . You could smoke a pipe without others hysterical coughing in response too. Also no pc. Freedom of speech. It seems like paradise compared to our country today yet he was Labour! There’s a turn up for the book!

  9. alte fritz
    Posted January 15, 2017 at 9:46 am | Permalink

    There you go again, Mr R, citing facts. Before you know it, we will not be able to trust the experts at the Treasury and Bank of England.

  10. turboterrier
    Posted January 15, 2017 at 10:15 am | Permalink

    What further proof do you need about the ignorance of politicians.

    On the Marr today show the Rt Hon Leader of the Opposition no less stated he wanted a renewable energy policy similar to the success that Germany has achieved. He obviously did not realise that Germany has been building coal stations for years to try and claw back their loss of output due to the disastrous nuclear decision to close their plants.

    To add insult to injury they then burn brown coal in them which is a bigger pollutant than burning black. Add to that the other countries in the far east following the coal generation route it is all about, hear it, see it and just ignore it. president elect Trump has the right idea expose it (RE) for what it really is. One ****ing great con sold to world by the snake oil RE industry and its investors.

    • Lifelogic
      Posted January 15, 2017 at 6:17 pm | Permalink

      Exactly.

    • Fedupsoutherner
      Posted January 16, 2017 at 12:41 am | Permalink

      The whole. Religion of renewables and so called man made climate change has been based on vested interest and lies since All Gore opened his rather large gob. A case of do as I say , not as I do along with all the other preaching film and BBC luvvies. I really think its about time some of our politicians went back to school and learnt real science.

    • Mark
      Posted January 16, 2017 at 1:28 am | Permalink

      Moroever, Germany has just had a month when solar and wind contributed very little, forcing them to rely extensively on coal. There are some details at the GWPF:

      http://www.thegwpf.com/the-end-of-germanys-energiewende/

  11. LondonBob
    Posted January 15, 2017 at 10:18 am | Permalink

    I understand they are very much aware of this and that they will ultimately come to an equitable arrangement. Personally I favour a hard Brexit as the starting point and see what we can negotiate from there, the red lines on movement of people etc. must remain red lines though.

    • getahead
      Posted January 16, 2017 at 3:02 pm | Permalink

      The key principles of the single market are the freedom of movement of goods, people, services and capital over borders. And if you are in the single market you are still under the rule of the European Court of Justice.

      Free movement of goods, services and capital is ok – but we will not be paying any contributions for that. Trade does not need the EU Commission.

  12. oldtimer
    Posted January 15, 2017 at 10:23 am | Permalink

    Despite this evidence, there are those who wish to remain in what amounts to financial servitude.

  13. graham1946
    Posted January 15, 2017 at 10:34 am | Permalink

    I don’t know if it is included in your figures, but it is not generally known that the import duties we pay on goods imported from the world outside the EU are also remitted to Brussels, so that will also come into our treasury after Brexit.

    I think you have mentioned this before but it is worth airing again as there are a lot of people who do not know of it and I did not hear of any Brexiteers mention it during the referendum campaign or since. The Remoaners need either to be enlightened or reminded depending on their knowledge. Most seem to have just a visceral hatred of Brexit rather than any in-depth knowledge.

    • Denis Cooper
      Posted January 16, 2017 at 10:24 am | Permalink

      75% goes to Brussels. The other 25% is to cover our collection costs.

      • margaret
        Posted January 17, 2017 at 11:40 am | Permalink

        and what is the total in real cash terms?

    • getahead
      Posted January 16, 2017 at 3:06 pm | Permalink

      Those who hate Brexit either gain financially by EU membership, like the BBC or wish to see the eradication of the nation state. Like the BBC.

  14. ian wragg
    Posted January 15, 2017 at 11:07 am | Permalink

    Quite.
    I find it hard to understand why successive governments bow at the altar of the EU.
    We are at a massive financial disadvantage which the previous administrations must have known about.
    Many times it has been suggested that a cost/benefit analysis be carried out but this has been conspicuously swerved for years.
    Brexit has focused on the detail and it is becoming increasingly obvious except for a diehard few, what a raw deal we get.
    Maybe one day we may learn why politicians have bankrupted us for the sake of Brussels.

  15. Antisthenes
    Posted January 15, 2017 at 11:12 am | Permalink

    Every time you write an article it becomes ever more apparent to me at least that the EU has nothing to bargain with when negotiating Brexit with the UK. Apparently the EU chief negotiator is now calling for free access to the UK banking sector as otherwise the EU would lose much of it’s money raising facilities. At the same time it is obvious that Brexit is not a situation that the EU wants and is desperate in fact to mitigate as much of it’s effects on the EU by any and every means possible. They should have thought about that when they arrogantly and contemptuously gave derisory concessions to David Cameron when he renegotiated prior to the referendum.

    The EU has nothing to bargain with and Brexit is going to seriously undermine it’s stability and viability. At the same time the EU cannot admit any of that so will have to show a brave face and bluff it has a superior position. It does not augur well for the UK if it does not make take it or leave it as it’s only negotiating position as any deviation from that will allow the EU to use not necessarily fair and reasonable tactics. As the EU no doubt understands that it is maybe fighting for it’s very existence.

  16. acorn
    Posted January 15, 2017 at 11:36 am | Permalink

    JR, I am assuming we still pay the EU bills in Euro? I don’t know if there is an agreed FX rate for the MFF 2014 – 2020. The drop in the Pound otherwise will affect the gross contribution Pounds into Euro and; local expenditure in Euro to Pounds? See Table 5 http://researchbriefings.files.parliament.uk/documents/SN06455/SN06455.pdf

  17. Bert Young
    Posted January 15, 2017 at 11:44 am | Permalink

    One way 0r another we are being ripped off by the EU . We have other priorities to attend to on our doorstep and we owe it to our citizens to put them first . I look forward to John’s further revelations .

  18. Mark
    Posted January 15, 2017 at 11:56 am | Permalink

    In addition there are about 125,000 EU students attracting loans for fees (or free education in Scotland), and additional maintenance loans and grants. This is worth £1.1bn p.a. at £9,000 a head for fees alone. A further sum needs to be allowed for to cover the element of funding from the block grant.

  19. English Pensioner
    Posted January 15, 2017 at 11:58 am | Permalink

    Sky news this morning said that Mrs May will want a ‘hard Brexit’ if UK can’t regain full control of its own borders and will announce this in the Commons this week. BBC says such rumours are untrue. So much for our news services!

  20. rose
    Posted January 15, 2017 at 12:18 pm | Permalink

    Very good to have these figures all together. Thank you.

    I suppose you daren’t give the additional figures for benefits, both financial and in kind – top up benefits, child benefit, housing benefit, attendance allowance, housing, health, education, share of infrastructure etc etc?

  21. Antisthenes
    Posted January 15, 2017 at 12:20 pm | Permalink

    Are our politicians and journalists as ignorant of so much that they opine on as they portray or are they just grossly over exaggerating or being deceitful to persuade us to come over to their beliefs. Listening to an excerpt of Corbyn’s interview on the Marr show about the single market this morning I can only come to the conclusion he is certainly guilty of all those things and epitomises the majority of pundits .

    One thing is obvious is that few ever look at something with an open mind and that judgement is more often than not made before any evidence is sort or produced. Facts being used or discarded dependent on the use to the judgement already made and not used to form that judgement. Especially is attractive is if there has already been formed a conventional wisdom on the subject. That way like the emperors magic clothes it is difficult to pronounce it is untrue. Too often means and effects are set in stone and become conventional wisdom crowding out more appropriate actions that obtain better if unconventional results. Whilst the powerful and influential cling to their conventional wisdom on Brexit real wisdom and knowledge means that will produce the best exit of the EU and gain the most for the UK will not be used.

  22. LordBlagger
    Posted January 15, 2017 at 12:28 pm | Permalink

    We pay around £700 million more to them each year for UK citizens to use their health services than they pay to use the NHS here.

    ============

    Given there are more EU citizens in the UK, than UK citizens in the EU, and the NHS costs more, this is just one factor in the NHS disaster.

    It’s not claiming the money from EU governments.

    Hence the leave vote.

    Free at the point of use, and freedom of movement of people are incompatible.

    Offer the EU free movement. Point out however that you will charge EU citizens the full cost of their state services in the UK. A minimum tax of 12K a year covers that.

    • ChrisS
      Posted January 15, 2017 at 11:05 pm | Permalink

      It’s not quite as your thinking, LordBlagger.

      The Government only pays the healthcare costs of those British citizens living in the 27 who are of state pension age. Those Brits abroad below that age have to fend for themselves.

      The reason that there is a large deficit is because far more British pensioners live in France, Spain and Italy than retired people from the other 27 live here.

      Of course, our doctors are far to priggish to get their hands dirty by asking patients for their healthcare status let alone demand money so everyone of working age from the EU who isn’t employed and paying NI contributions gets a free ride.

      That doesn’t happen in the rest of the EU ! I believe that if you are in Germany you still have to work for four years before you qualify for health insurance. Here you qualify straight away as soon as you start a job !

  23. Peter D Gardner
    Posted January 15, 2017 at 12:30 pm | Permalink

    Wonderful clarity. I repeat, once the single market is off the table so too is immigration because it is not on its own an EU competence. The negotiations would be greatly simplified and goodwill generated, and uncertainty ended for individuals and businesses if Mrs May were simply to make it clear the UK does not wish to indulge in complex negotiations, does not want to remain within either the EEA or the Customs Union and will not accept any juridiction of the ECJ. What’s left to discuss on the Brexit agenda? Very little, just routine matters like directives n the pipeline, outstanding cases before the ECJ, winding down payments, agreeing outstanding liabilities and shares of assets etc..

    Of course UK and EU will continue to cooperate on security etc as before. Much cooperation can be done without formal treaties, MoUs or exchanges of letters would suffice. UK will maintain a UKRep.

    Trade need not take long to agree at heads of state level. UK is already compliant with all EU requirements. All that is needed is to agree to continue with that position and set a timescale for the details of controls etc to be dealt with by administrative staff and customs.

    Of course if the EU want something better than a continuation of the status quo, UK may agree to hold talks on their proposals and in the meantime the status quo continues, at least for a limited period. If any interim deal is required at all, it would be free trade. Anything else would take as long as a final deal to put in place so why do it?

    • Denis Cooper
      Posted January 16, 2017 at 10:39 am | Permalink

      In retaliation for the UK’s resumption of control over immigration policy they are threatening something worse that the status quo on trade. It should be asked, and asked very publicly, how that kind of deliberately destructive plan can possibly be squared with the EU having signed up to a WTO initiative to facilitate trade.

      • J Melford
        Posted January 17, 2017 at 8:38 am | Permalink

        The EU cannot criticise Britain for wanting to limit economic migration as part of a trade agreement. It seeks to deny any substantial ‘free movement’ of people in its other FTAs, and in the evolving TISA proposals.

        Free movement of people (in the sense of migration rather than temporary access to provide services) must be exposed therefore as not an essential part of trade but part of building ‘a country called Europe without internal frontiers’.

  24. zorro
    Posted January 15, 2017 at 12:31 pm | Permalink

    Good points, and the government needs to give the EU its worth. I am tired of the pathetic, implicit threats made by the EU and its UK based supporters. Call a spade a spade and show the financial balance sheet. What we are seeing in many countries now is a reaction against the essentially left wing, politically correct, cultural marxism (designed to destroy degree by degree normal family and society life), which has prevailed for decades shutting down dissent by changing the language.

    The security services are a weapon used to enforce this by fake news/allegations and why they are uniformly against Brexit and Trump. Fortunately, their activities are now exposed and all the other doubtful incidents/deaths in the past can be considered afresh in light of those tactics. Great examples to show how the unelected functionaries try to control the governance of the electorate.

    zorro

    • turboterrier
      Posted January 15, 2017 at 11:16 pm | Permalink

      @ Zorro

      the financial balance sheet.

      The one they have not had signed off for years?

  25. LordBlagger
    Posted January 15, 2017 at 1:01 pm | Permalink

    The UK is 11.5% of the EU budget.

    They have demanded 50 bn to pay their pensions because they spent all the contributions.

    That means they think they owe 435 bn in total to their 33,000 Eurocrats.

    13.2 million per Eurocrat.

    I’d tell them to get off when it comes to that demand. They spent the contributions

    Demand instead they buy the UK out of the EU assets.

    They can sell one of their parliamentary buildings.

    • Denis Cooper
      Posted January 16, 2017 at 10:40 am | Permalink

      Apparently most of the buildings are leased.

  26. Denis Cooper
    Posted January 15, 2017 at 1:08 pm | Permalink

    I don’t know whether Clegg is saying this out of ignorance or just as another deliberate attempt to deceive:

    https://www.theguardian.com/politics/2017/jan/14/nick-clegg-theresa-may-norway-style-trade-deal-brexit-eu

    “Theresa May should return the UK to the same 1960s trading arrangements it had with Europe before it joined the EU if she decides there is no alternative to a hard Brexit, according to former deputy prime minister Nick Clegg.

    Before a major speech by the prime minister on Tuesday, in which she is expected to lay out more details of her Brexit plans, Clegg says the “most sensible and softest” option would be for the UK to re-enter the European Free Trade Area (Efta), which it was instrumental in establishing 57 years ago.”

    It needs to be clearly understood that we cannot re-enter the EFTA which we helped to set up 57 years ago simply because it no longer exists as it was then set up.

    Yes, there is still an organisation with the same name – actually the European Free Trade Association, not “Area” – but when we originally helped to set it up that was through the 1960 Stockholm Convention, while it is now governed by the 2001 Vaduz Convention which has moved it much closer to the EU:

    http://www.efta.int/legal-texts/efta-convention/detailed-overview-of-the-efta-convention

    “The European Free Trade Association (EFTA) was established by a Convention signed in Stockholm on 4 January 1960. The main objective of the Association was to liberalise trade among its Member States, and the Convention thus contained basic rules regarding free trade in goods and related disciplines.”

    “The updated EFTA Convention, the Vaduz Convention, was signed on 21 June 2001 and entered into force on 1 June 2002, in parallel with the EU-Swiss Bilateral Agreements. It included several significant changes, of which the most important was the integration of the principles and rules established between the EU and the EEA EFTA States in the EEA Agreement, and between the EU and Switzerland in the EU-Swiss Bilateral Agreements. Important new provisions included the free movement of persons, trade in services, movement of capital and protection of intellectual property.”

    Alas, we cannot go back in time and re-join the 1960 EFTA which we left in 1973, it has moved on since then and it is no longer what we wanted then or want now.

    • Chris
      Posted January 15, 2017 at 7:22 pm | Permalink

      I think R North seems to think we can? I have had more than enough of his highly academic/economic analyses of issues, which repeatedly demonstrate one huge flaw. They completely ignore politics and human nature. Ideal economic solutions are not always the right political solution. In fact I think what he advocates may well represent political suicide, but he apparently cannot, and will not, see it.

      • Denis Cooper
        Posted January 16, 2017 at 10:10 am | Permalink

        I’m sure he’s well aware that EFTA is not the same beast as when we left it, but I guess he’s not too bothered about some of the changes and so he doesn’t think it’s worth pointing them out. Control of immigration policy is obviously low down on his list of priorities, and he reckons that the EEA would give us “some limited control” and that would be sufficient. Which is fair enough as a personal viewpoint, but it is not what most voters want.

        • Chris
          Posted January 16, 2017 at 4:42 pm | Permalink

          “…but it is not what most voters want”. Agreed, and yet he seems absolutely determined to sabotage those in government who are working to implement what we voted for. He really seems to be the best tool that the Remainers have as he advocates the EEA option, (with sometime in the distant future leaving the EU properly) which of course provides the Remainers with the easy stepping stone back into the EU, thus preventing us actually leaving properly. His EEA option does not answer effectively the concerns of those who voted to leave (border control, free movement of people/mass immigration, budget contributions, ECJ, and more) but instead provides a partial short term and unsatisfactory sticking plaster approach to those problems. That is the route of political suicide, I believe.

  27. John Finn
    Posted January 15, 2017 at 1:47 pm | Permalink

    John

    I’m really interested in these figures. The thing I find frustrating about a lot of this stuff is the time it takes me to dig around for the data.

    I know you’re busy but if it’s not too much trouble could you post a link to the data where possible.

    Thanks.

  28. Worzel
    Posted January 15, 2017 at 1:59 pm | Permalink

    You can’t blame the EU for trying it on with holding on to our money. They are dealing with dafties and they know it.
    What fools in our government hand over tax payers money to carrot growers in places they did not have an indigenous population to pick them? So, you allow them to import labourers from abroad, for free, without charging the growers, and provide the labourers with access to our healthcare, social housing, child benefits, schooling and Law?
    My word, I can buy a kilo of carrots for less than £1 but only because the tax-payer pays the rest, the real price for a dope who grows carrots where he did.

    The government should end this nonsense. Either the growers grow something less labour-intensive or he gets a job for an employer hopefully more wise. It would be cheaper to import carrots, rather than importing human beings. Obviously!
    Perhaps the foreign labourers can get a job picking carrots back home where the grower will have a big order from the UK!

  29. Denis Cooper
    Posted January 15, 2017 at 2:15 pm | Permalink

    I’m staggered that Hague thinks he can get away with this – doesn’t he realise that his erstwhile reputation as a “eurosceptic” has been shot to pieces?

    https://www.ft.com/content/9114eeb0-d91c-11e6-944b-e7eb37a6aa8e

    “In his first newspaper interview since last June’s Brexit vote, the former foreign secretary urged Mrs May to make the EU a “fair offer on migration” in exchange for a “sensible, fair system of trade”, limiting any damage to British business.”

    “Under his plan any EU citizen with a job offer in Britain would qualify for a work permit. There would be little or no welfare support but the freedom to work in Britain would be retained.”

    Right, so agencies will make a good and profitable business out of recruiting cheap and biddable workers from eastern Europe to fill vacancies notified to them by their clients, and armed with their job offers those people will automatically be granted work permits; so effective control of EU immigration into the UK will reside with those profit-seeking agencies and their clients, not with the UK government and Parliament.

    Mrs May should not make any “offer on migration” at all, not this stupid offer suggested by Hague and nor the even more stupid “offer” suggested by British Future:

    http://www.britishfuture.org/wp-content/uploads/2016/10/Britains-immigration-offer-to-Europe.pdf

    “Britain’s immigration offer to Europe – How could a new preferential system work?”

    She should simply say that we are taking back complete control over our immigration policy, and that is non-negotiable and will not be part of the negotiations.

    No deal with the EU linking immigration to trade or any other matters – that was the fatal error made by the Swiss – and no bi-lateral deals with individual member states without provision for the UK to unilaterally terminate the agreement on reasonable notice.

    And no automatic granting of work permits on any criteria whatsoever, least of all that the person has been proactively furnished with some kind of job offer – maybe genuine, or completely fraudulent, or part way between – in order to qualify under Hague’s rule.

    Moreover while I realise this is not a popular position I’m not necessarily in favour of arbitrarily depriving foreign immigrants of welfare benefits once we have agreed that they can come here, and so in effect accepted that they will be under UK protection. I don’t think it would even make much difference to the volume of immigration from countries where the standard of living is so much lower that there is a strong economic driving force for people to try to come here to work and better themselves.

    • Peter D Gardner
      Posted January 15, 2017 at 8:33 pm | Permalink

      Denis, you are right: if trade and immigration are decoupled, then immigration becomes a bi-lateral issue between states because it is not of itself an EU competence.

  30. Leslie Singleton
    Posted January 15, 2017 at 2:29 pm | Permalink

    Liam Halligan is brilliant in the Sunday Torygraph today and I for one don’t see how anybody could possibility not agree with every word–except perhaps those motivated more by personal, and family-company, cupidity rather than the benefit to and standing of the country as a whole.

  31. Denis Cooper
    Posted January 15, 2017 at 3:01 pm | Permalink

    It seems the FT is finally getting it:

    https://www.ft.com/content/444e5772-db21-11e6-86ac-f253db7791c6

    “Will there be a transition deal?”

    “It depends on how you define a transition deal. Mrs May has said that the government “will discuss whether we need an implementation phase”. This implies a period after leaving the EU to enact rules already agreed upon. That contrasts with another definition — a holding period while a permanent EU-UK trade deal is negotiated.”

    Which “holding period” could unfortunately turn out to be unlimited in its duration.

    • Chris
      Posted January 15, 2017 at 7:24 pm | Permalink

      Yes, that is the enormous danger of having a step by step leaving process, as apparently advocated by North et al.

    • Peter D Gardner
      Posted January 15, 2017 at 8:37 pm | Permalink

      Denis, the holding period should be a continuation of current free trading in goods and services because UK is already compliant with all EU requirements. Any other relationship would take as long to agree as a final arrangement. Mrs May should listen to Michel Barnier, who, it seems tome talks more sense than our own government. He says exit first, then consider a future relationship. I say not only that but both EU and UK need to focus on developing their new paths independently and only then consider a further entanglement.

      • Denis Cooper
        Posted January 16, 2017 at 10:42 am | Permalink

        Well, we may want to do something about agriculture and fisheries at an early stage and that would be more complicated.

  32. Tony Hart
    Posted January 15, 2017 at 4:13 pm | Permalink

    Your financial revelations are, as always, very revealing. I had thought we paid £8.5 billion net but it looks as though it has risen!! Surprise, surprise One stat I picked up from Twitter. We are the 2nd highest budget contributor (just behind Germany) and we pay just more than the other 26 nations net (some get money OUT OF the EU!!). Why do we pay more than France?

    Not only do British Citizens living in EU get NHS support. The pensioners are also spending their HMG pensions abroad; could be as much as £15 billion. By the way, why don’t EHIC pay the full cost of French medical treatment; why is it around 60%?

  33. Anonymous
    Posted January 15, 2017 at 5:41 pm | Permalink

    It’s annoying when the BBC says “Our farmers get X amount from the EU.” It uses Country File in particular to get to people.

  34. formula57
    Posted January 15, 2017 at 5:43 pm | Permalink

    Your words here today will have been repudiated in the hearts of the likes of Dame Lucy Doolittle and Dr Spendlove I feel sure but cause rejoicing elsewhere, as will the astonishing remarks of Chancellor Hammond about changing our economic model in the face of the Evil Empire attempting to do us harm rather than our passively accepting its knavish tricks. Where did this sufficiency of backbone by the Government suddenly come from?

  35. Jack
    Posted January 15, 2017 at 6:09 pm | Permalink

    If the government continues its fiscal consolidation plans it will mean that Brexit will be a failure. 2% annual GDP growth is just not enough, especially after a recession 9 years ago that we have barely recovered from.

    Brexit itself will have little impact on the macro fundamentals, since they are driven by aggregate demand. But without huge fiscal stimulus to accompany Brexit, the continuation (or perhaps even deterioration medium-term) of our low GDP growth and stagnant productivity will not bring the Remainers on-board, and may even cause many Brexit voters to reconsider their position.

    JR, I strongly recommend that you do more research on the monetary operations and reserve accounting of sovereign money systems like ours. Books like Modern Money Theory or The Seven Deadly Innocent Frauds of Economic Policy are great, and the latter is free online. It’s our only hope for a successful Brexit.

    I assure you that once payroll taxes are cut significantly, and we get huge government spending increases, then the economy will grow at least 6% annually, probably more – and the extra demand will spur improvements in productivity too, which is ultimately what makes us all rich. How can we expect output per hour to grow when currently output is barely growing?

    • Jack
      Posted January 15, 2017 at 6:18 pm | Permalink

      Also I am noticing that the raw unemployment figures are rising, and the raw employment figures are falling. While I don’t know whether this will continue, I do know that unemployment is a direct function of total spending (sales) in the economy. Unemployment is a lack of available work that pays in that currency, not a lack of work per se (there’s loads of work to be done). We can have a <1% unemployment rate if we so choose, Brexit or not.

  36. Simple Soul
    Posted January 15, 2017 at 6:45 pm | Permalink

    I have just read Philip Hammond’s remarkably open and honest interview with Welt am Sonntag. It showed him in what to me was a new light as having a statesman’s grip on the Brexit question in its widest nature. He spoke with authority and conviction and seems to have lost his doubts about the British people’s ability to stand on their own.

  37. Simple Soul
    Posted January 15, 2017 at 6:46 pm | Permalink

    This was a good rebuttal of the fond EU hope that we are a house divided and all they have to do is wait.

  38. a-tracy
    Posted January 15, 2017 at 8:10 pm | Permalink

    ‘We pay around £700 million more to them each year for UK citizens to use their health services than they pay to use the NHS here.’

    So why is my son being told he has to buy compulsory medical insurance for his compulsory university course working visit to Spain?

    • ChrisS
      Posted January 15, 2017 at 11:11 pm | Permalink

      Because you only get “Free Healthcare” paid by the British Government if you are a British citizen living in another EU country and you are over state pension age.

      In return we effectively give all EU students coming to Britain free health care !!!!!

      • a-tracy
        Posted January 17, 2017 at 12:32 pm | Permalink

        So do Spain recharge the UK when it treats expats from the UK living in Spain? I thought they were covered by the Spanish Health Service.

  39. zorro
    Posted January 15, 2017 at 10:53 pm | Permalink

    1030 BBC news – wonderful – PE Trump with Michael Gove and prompt trade deal promised by his team – BBC journalists in a total spin cognitive dissonance spiralling out of control – female correspondent juts out head…’we know deals can take longer than three months or years….’…… ‘And other matters in the news’ (Clive Myrie)….. a truly great moment.

    zorro

    • hefner
      Posted January 16, 2017 at 11:44 am | Permalink

      Calm down, dear. Since yesterday it has become clear that such a US-UK trade agreement might not be before the UK is actually out of the EU (from M.Gove’s interview this Monday morning on Radio4).

      • zorro
        Posted January 16, 2017 at 5:26 pm | Permalink

        We know that…. that’s because we are IN the EU still dear!

        zorro

    • Chris
      Posted January 16, 2017 at 4:45 pm | Permalink

      Yes, indeed, it is wonderful zorro. What a great start to the day.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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