The ever rising costs of the EU


Apologists of our membership of the EU always like to minimise the budget costs to the UK. They do this by telling us how small the net contributions are, and by ignoring the huge administration and compliance costs that fall on UK government and companies.

My colleague Bernard Jenkin has been digging the figures out with the help of the Commons library. The EU budget is large, getting larger and ought to be diminished.

Years UK’s gross contribution UK abatement (Thatcher’s rebate less Blair’s give-away) Cash budget cost to UK
2011-12 £16.1bn £2.8bn £13.3bn
2012-13 £16.4bn £3.6bn £12.8bn
2013-14 £17.6bn £4.0bn £13.6bn
2014-15 £18.6bn £4.3bn £14.3bn

The EU  preaches that member states have to cut spending and cut their borrowing. At the same time the EU increases its spending and demands more money from us to pay for it. When considering the cost of EU membership we should always look at the gross contribution less rebate, as this is the true cash cost. That is the amount of tax we have to raise to pay for the EU. We should also add in a much larger annual sum for the costs of UK administration and compliance of all the rules, regulations and programmes required by the EU.

I am glad the Chancellor confirms today a freeze on Council Tax for next year, at the cost of £800 million. Commentators ask where this money comes from. The answer is easy – it will all be borrowed. It is needed because total spending keeps going up. That’s why some of us would rather pay for the freeze on Council Tax by deferring increases in overseas aid, or by spending less on the EU.


  1. Dr Alf Oldman
    October 3, 2011

    Thank you for making this critical point.

    In times of austerity, the EU budget should not be exempt. UK cuts falling on both the Public & Private sectors MUST be matched by savings from the EU budget. The troyka should start at “home” in preaching austerity.

    It’s not as if the high contributions to the EU can be easily matched to increased benefits. The indecision of the EU political processes in relation to the Euro has brought the World close to financial catastrophe.

    The “Eurocracy” is bloated, ineffecient & patently ineffective.

    The UK is looking for 30%+ cuts in Public Sector admin costs, so why are we not demanding the same from EU?

    I believe that Tory back-benchers should be trying to encourage the UK Government to reduce gross contributions to the EU.

    1. Single Acts
      October 3, 2011

      We could of course unilaterally say “in line with your recommendations, we have cut 30% off all budgets including yours, so here is a cheque for XXX. If you don’t accept this as full and final payment, don’t cash it” Then watch ’em squeal. If we could get one or two other countries to do likewise, we may achieve de facto, what we could never achieve de jure.

    2. Jose
      October 3, 2011

      In the overall scenario our net contribution is not a lot of money. Given that our finances are in an appalling state, any extra contribution will help. Overseas aid, EU contributions, quango costs, civil service costs….how long can the list be? There are just so many options for extra contributions and yet the government seems to be doing no more than delay delay delay the necessary cuts.
      Too much hot air and not enough action from the coalition!

    3. Norman Dee
      October 3, 2011

      “I believe that Tory back-benchers should be trying to encourage the UK Government to reduce gross contributions to the EU.”
      So like a grand organised, piss into the wind ?

    4. sjb
      October 3, 2011

      “The main reason for the increase [in the EU budget] is that we must pay the bills coming from projects from across Europe. Such projects that benefit local communities and businesses would probably never have been launched back in 2007 without the commitment of EU funding; to stop funding them is unthinkable. Firstly we could be sued for not respecting the terms of the contracts, secondly, this would harm Member States’ budget even more since they expect us to reimburse the EU share of the funding that they have already paid to beneficiaries; thirdly, stopping such projects half-way through would be detrimental to whole communities. We cannot punish our citizens, companies, local and regional authorities who have a right to get their bills paid. ”

  2. Antisthenes
    October 3, 2011

    What about the loss of business cost. All those EU rules and regulations add to the cost of providing goods and services making them noncompetitive to foreign providers. It also discourages small businesses and would be entrepreneurs.

    1. uanime5
      October 4, 2011

      Why not just repeal all the UK statues as well? They also discourage small businesses and would be entrepreneurs.

      Just because directives and regulations come from the EU doesn’t make them bad. Also directives and regulations affect all EU countries the same way so no EU country has an advantage that another EU country does not.

  3. norman
    October 3, 2011

    But think of the savings – rather than having 30 (whatever) bureaucracies spread around Europe making up what are often nonsensical rules to hinder their citizens it’s so much more efficient to have one centralised set of bureaucrats sitting in their ivory towers in Brussels to impose such across the whole of Europe.

    Why, one day we may even be able to do away with, or at least render them little more than a paper exercise, pesky regional elections that so hinder the progress and vision of these intellectual giants.

    What’s not to like?

  4. lifelogic
    October 3, 2011

    Also we should add in the many inconveniences and costs heaped upon the UK by the EU:

    The absurd VAT system, the lack of fee trade in many goods, the farming market distortions and controls, the legal complexities, the energy nonsense, the recycling and landfill regulations, the absurd fishing controls and all the rest. Also the damage caused by the absurd Euro structures to the Euro and World economies.
    Also the costs of benefit tourism.

    Less of course any benefits, if you can think of any, (benefits that Norway and Switzerland do not get already that is).

    Perhaps the Libdems could think of some – I have not heard of many beyond the usual influence and free trade. Most of which we would have anyway for nothing.

    1. lifelogic
      October 3, 2011

      You say “That’s why some of us would rather pay for the freeze on Council Tax by deferring increases in overseas aid, or by spending less on the EU” – or perhaps just getting rid of the many pointless and damaging things they do, providing the services that are needed more efficiently, getting rid of the many parasitic layers of management and cutting pay and pensions in the state sector.

      1. lifelogic
        October 3, 2011

        Also get rid of pay offs for workers beyond say two months. Vast amounts are wasted on huge pay offs and suspending people on full pay for years because they, allegedly, said or did something non PC.

        1. uanime5
          October 4, 2011

          Why not just cap pay offs at £50,000. That way executives with bloated salaries will see a cap on their pay offs while low paid workers will still receive a fair amount.

          1. lifelogic
            October 5, 2011

            The lower the better for all.

    2. lifelogic
      October 3, 2011

      I see reported that Ed Miliband’s army 35,000 demonstrators of, mainly, state sector unions want to stop the “cuts”.

      Could we perhaps at least just start them first?

    3. lifelogic
      October 3, 2011

      Norman Tebbit on his blog today says –

      “the question David Cameron must answer this week: what would he do with a Tory majority in 2015?”

      But even if he does set out this vision, will anyone believe him this time. In order to be trusted, ever again, he must surely deliver now on his last promises.

    4. lifelogic
      October 3, 2011

      George Osbourne today:

      “If this party is anything it is the party of small business and enterprise”

      Well then why do they keep kicking them in the teeth with the lack of bank lending, no retirement, daft OTT health and safety, too big a state, green over priced energy, endless EU rules, equality nonsense, gender neutral insurance insanity, agency workers directives, minimum wage & increases, huge taxes, tax complexity and all the rest.

      And he still believe in the global warming exaggerations despite all the now rather clear evidence.

      Perhaps two good things he did mention – but after 18 months and no details whatever!

      A fee to bring an employment tribunal case (how much?) and an extension to two years.
      (What about businesses expenses/distraction in defending cases?)

      Some lending direct from government to small business in some way “treasury to look it to it” – No details I will believe it when I see it, doubtless it will be for certain daft green schemes or similar.

      This is not a strategy for growth it is totally pathetic.

      1. lifelogic
        October 3, 2011

        Now I have to listen to Jeremy Hunt wittering on about the over blown, school sports day next year, doubtless hugely loss making and his white elephant buildings.

        Then finally claiming – No nation has done as much as Britain for freedom and democracy – So why is the current government, together with the EU, doing so much now to destroy this democracy both in the UK and Europe.

    5. lifelogic
      October 3, 2011

      I understand that an undertaking was given at the conference (by someone I did not catch whom) that the government will not impose carbon restrictions unless all our EU competitors do.

      Well just great – so it is just for all the rest of the world to out compete us and do our carbon emitting for us – great plan.

      Pathetic, Pathetic, Pathetic – since all seems to have to be said three times at conference or “in sin gle syl lab les”

    6. lifelogic
      October 3, 2011

      In the hope of getting a bit more detail on Osbourne’s vague “credit easing” I stumble across Economic Secretary to the Treasury – Justine Greening MP being interviewed by Andrew Neil.

      She clearly has not got a clue about finance, business or the new proposed scheme. Why on earth is she a minister – let alone a treasury minister and worse still being put on TV. The fact the Osbourne has her on board is a rather worrying sign on his judgement.

      She does, I suppose, at least make the (pleasant enough, but totally out of her depth) Tory Chairman Baroness Sayeeda Warsi look good in comparison.

      1. alan jutson
        October 4, 2011


        Yes I saw the same interview, it made me cringe, she simply did not have a clue, way, way, way out of her depth, simply pathetic.

    7. uanime5
      October 4, 2011

      Norway and Switzerland are allowed to trade in the EEC because they implement all EU law, even though they have no influence over it. A country cannot enjoy the trade benefits of the EU without obeying the laws of the EU.

      reply: What nonsense – the US trades a lot with the EU but it certainly does not introduce EU laws.

  5. Mike Stallard
    October 3, 2011

    I have just had the privilege of reading Dan Hannan’s article in Standpoint. In it he claims that only two European countries have consistently put in more than they have taken out of the European Project: Germany and, yes, Britain.
    He also maintains that many of the elected governments are getting increasingly out of touch with their electors over the whole of Europe.
    The trouble with Europe is that is runs terribly deep. Right out here in the Fens, I am personally out of a job teaching immigrants because EEDA has been shut down – European money talks even out here! So there must be lots and lots of people whose livelihoods depend on pretending that everything is wonderful in Europe.

  6. matthu
    October 3, 2011

    Raedwald could not have framed it better:

    “We want free trade and open borders for Englishmen but not for poor Europeans in the other direction. We want the EU off our backs and the power to decide our own laws; we want an end to the EU’s tax levy, an end to the EU diplomatic service, an end to the interference of the European courts and of course nothing at all to do with a European currency. ”

    The people want a referendum to enshrine this in law so that every future action, every future negotiation prioritises the wishes of the people and not some elite goal of the political class.

    Now put this to the people.

    1. uanime5
      October 4, 2011

      So he wants to leave the EU and lose 40% of our exports. How is this an improvement?

      Reply: No-one wishes to lose 40% of our exports, and being outside the EU would n ot have such a result

  7. Javelin
    October 3, 2011

    Breve now admits it’s deficit will be 8.5% rather than the 7.5% required to meet IMF conditions. 11th November is the next IMF review. The default looks as though it will happen before then. If it does not then it will be achieved through a “break” in the rules. Not sure if that will be illegal, political or credibility break by the IMF – but it will give those who give money to the IMF reason to stop giving money. Presumably some kind of contract is drawn up with the IMF when the UK hands it’s cash over.

    We now have 6 weeks for a soft default to happen before a hard default on the weekend of the 11th of November.

    1. Javelin
      October 3, 2011

      Sorry typo. I meant “Greece now admits”

  8. Martin Cole
    October 3, 2011

    This is most interesting and Mr Jenkin deserves the thanks of many people for his no doubt gruesome and frustrating research.

    On my browser (Mozilla) the Numbers and columns do not line up. To be certain I do not misquote the figures, could you please write out in a sentence one complete line of figures for one year, so that I may then align the other years?

    1. Stephen
      October 4, 2011

      I had the same problem, but copies the data to Excel and it is then readable.

      1. Stephen
        October 4, 2011

        Sorry mean ‘copy’

  9. Martyn
    October 3, 2011

    Surely it is madness to borrow the money the UK needs to meet our present level of contributions and soon to meet the EU’s insatiable demands for increased contributions? The EU is a sclerotic, bureaucratic, autocratic, expensive, wasteful and undemocratic organisation which, despite the rhetoric and spin to the contrary, seems bent on reducing the UK into dumb subservience. Weirdly, for a nation such as ours with its past record past of bringing down earlier European dictatorships, successive UK governments have eagerly participated in handing over more and more of our sovereignty to assist the EU in its aim.
    Sadly, few voters see and fewer care about the cost per household of EU membership, let alone the hidden costs you describe. This being so, our politicians (well, most of them) can ignore the voters and carry on borrowing more and more money to add to the debt to be carried by our children, grandchildren and beyond. Truly, those whom the gods would destroy they first make mad….

  10. A.Sedgwick
    October 3, 2011

    The costs of our “membership” of the EU are grossly excessive and unsustainable.

    CMD on AM yesterday was spinning his usual stuff, but interestingly he was honest he is not a Eurosceptic in any meaningful interpretation of the word. Something most of us knew anyway.

    He cited the council tax freeze as a Conservative success – as you say on more borrowed money. He sympathised with increased electricity prices – why Dave?

    I could go on but it is too depressing that we have ended up with him after 13 years of Nulab.

  11. Boudicca
    October 3, 2011

    The UK’s contribution to the EU shouldn’t be reduced, it should be cut completely. The British people have never voted to be a member of this anti-democratic political monstrosity and yesterday, our Prime Minister-without-a-mandate announced once again that only HIS and other politicans’ opinions count. Our opinion is not wanted, not needed and will be ignored, anyway.

    Some ‘Democracy’ we live in. We have an elected dictatorship, which in turn is governed by an unelected dictatorship in Brussels. And like all dictatorships it is corrupt, riddled with fraud and does not act in the interests of the people – only itself.

    1. Disaffected
      October 4, 2011

      Well said, spot on. I think it is called a polyarchy.

      Cameron is so pompous it is unbelievable, he now says the majority of the British public do not want an in out referendum. So why did he offer it in opposition??

    2. Tim
      October 4, 2011

      I totally agree and all we have is more of the same. So at all future elections we should do something different and vote for UKIP!!!!!! Then the Tories may do something about wet Dave and George.

    3. uanime5
      October 4, 2011

      Actually in the 70’s there was a referendum and the British people voted to remain in the EU.

      Also what is this ‘unelected dictatorship’ you refer to? Is it the European Council?

  12. alan jutson
    October 3, 2011

    So this deficit (Contributions to rebate) is also getting wider.

    It seems we are not making many in roads into any real cost savings/reductions anywhere, we are still just slowing down the increase in expenditure.

    The best opportunity for decades (Labours total and utter disaster) and the Goverment are still pussy footing about.

    18 months wasted just tinking around, when we should have had a real plan, real action, and at the very, very least, natural wasteage in every government department (alhough this is now more difficult given the no default retirement age policy) with a no replacements policy in all apsects.

    A council tax freeze, paid for out of borrowed money is not a freeze John, as it will be paid for out of taxation.
    If you have a freeze it means the budget stays the same, or at least it did when I went to school 50 years ago.

    For years I had my doubts about Brown being able to add up, I am now wondering if its something in the coffee at no 11.

    Cameron does still not get the argument about the EU does he !
    Clegg is probably still protecting his current and future pension rights.
    Our foreign secretary seems to have been struck dumb.

    All very god telling the Eurozone to sort our their problems, but when are we going to sort out ours ?

    What a team !

  13. oldtimer
    October 3, 2011

    It is worth recalling that that the EU has failed to produce unqualified audited accounts for the past several years. Whistle blowers inside the EU administration have been sacked for the trouble they have caused. MEP expenses are, it seems, out of control. Corruption stalks every subsidy handout to producer interests. It has been shown that the EU has paid pressure groups and front organisations to lobby it for the policies and directives it wants to introduce – specifically to promote its green agenda. The Eurocracy enjoys exceptionally privileged tax and benefits perks, including pension entitlements. A condition of their continued entitlement requires the beneficiaries to continue to support the EU. This interest should be, but is not, declared whenever such beneficiaries (such as former MEPs) speak on EU issues which affect the UK taxpayer. It raises the question, therefore, whenever former MEPs speak as MPs in Parliament, whether they speak with forked tongue or not. At the very least, they should declare their interest and their apparently divided loyalties – to the EU and to the UK. There are a few members of the House of Lords in the same boat, eg former EU Commissioners. Should they not be required to choose which constituency they wish to support and make a conscious and explicit decision to accept either the Queen`s shilling or the EU euro? If it is the latter, why should they be allowed to continue to sit in the UK legislature?

    Re Mr Osborne and where the money for next years council tax freeze will come from, he was careful in his BBC Breakfast interview with his choice of words. He said it would be paid for out of savings identified in spending “plans”. As you have pointed out, the Coalition is failing to meet its current spending plans by a wide margin. Underspending in the next financial year will require a miracle – and miracles do not happen.

    1. uanime5
      October 4, 2011

      “It has been shown that the EU has paid pressure groups and front organisations to lobby it for the policies and directives it wants to introduce”

      Can you explain where this has been shown?

      “The Eurocracy enjoys exceptionally privileged tax and benefits perks, including pension entitlements.”

      Just like MPs.

      “There are a few members of the House of Lords in the same boat, eg former EU Commissioners.”

      In other words former UK Ministers, including Prime Ministers.

  14. ian wragg
    October 3, 2011

    The EUSSR is like Hydra and continues to multiply.
    Every new power grab involves more spending and more bodies to administer us. I see in todays paper Roon thinks our future lies within the EU. Maybe his is but the rest of us are just cannon fodder to pay for the corrupt entity.
    As the EU goes down the tubes, will Cameron and all the yes men have their assets confiscated for reparations and will the likes of Hesletine and Clark be humiliated in public.
    Perhaps not

  15. Brian Tomkinson
    October 3, 2011

    This is the EU of which Cameron wants us to remain a member, regardless of our opinions. Have the accounts of this organisation ever been signed off by their auditors? Worse still, this is the organisation that, for its own political ambitions, created the Euro and a Eurozone in such a cack-handed way that the outlook for us all is dire.

  16. sm
    October 3, 2011

    If £800m = no increase in Council Tax. (£72pa on radio4) £15bn could =£1350 reduction in Council Tax. In or Out?

  17. Iain Gill
    October 3, 2011

    you could increase the tax and national insurance for ICT work visa holders to the same level as Brits have to pay, there you go nice and simple tax increase

    you could remove many people from the list of people entitled to free nhs cover, starting with folk here on work visas from countries which do not provide reciprocal care for Brits working in their home country, there you go nice and simple spending reduction

    as you say you could stop “international aid” and redeploy the civil servants doing that to something more useful

    it is often said people complain but fail to come up with sensible tax increases or spending reductions, I could reel off hundreds that would not impact the core business of the government or the legal decent honest british residents

  18. Huw Clayton
    October 3, 2011

    The table, as it is published in the post, is rather difficult to understand because the tabs appear to have ended up in the wrong place – common problem with this platform, I know. Might I suggest drawing it up as a table in Word and then inserting that into the post? It is an important point and it would be useful to have the data readily accessible.

  19. Disaffected
    October 3, 2011

    Spot on John. As I said last week the Government always tries to minimise the cost. The scale is eye watering when they keep telling us that there is a need for cuts. They ought to be honest and say it is a political choice and see how much traction they get from the public. With a £42 billion trade deficit last year I think the argument for a trade agreement is by far the way the UK ought to approach any agreement with the EU not political or fiscal union wanted by Clegg Alexander, Huhne , Cable and chums. If we are buying on a large scale from EU countries they would not want to lose the business. Presenters ought to start probing when Clegg adn cameron say it is in the national interest.

  20. Rebecca Hanson
    October 3, 2011

    “current public spending rose by £31.9 bn or 5.3% in the first year of this government”

    From yesterday’s blog.
    Just for context.

  21. Electro-Kevin
    October 3, 2011

    EU spending and Foreign Aid are particularly unpopular.

    Seen as putting money in the pockets of corrupt foreign leaders whilst we worry about our livelihoods and the prospect of our kids being unable to afford to go to university.

  22. Denis Cooper
    October 3, 2011

    And the budget cost of our EU membership is only a fraction of the real total cost, for which there have been various estimates ranging from £50 billion a year to £250 billion a year.

    On first glance a central estimate of £150 billion a year may seem absurdly high, but bearing in mind that it corresponds to about 10% of GDP and that the EEC/EC/EU has been a drag on our economy for nearly four decades now it’s actually quite plausible.

    None of the cost estimates has come from the UK government, which irrespective of the party or parties in charge routinely maintains that the massive economic benefits of EU membership are self-evident and so there is no need to carry out any cost-benefit analysis.

    It should be said that if we left the EU now we wouldn’t instantly be better off by that £150 billion a year; it would take many years to repair the damage which has been done, and some of it may be irreparable.

  23. Richelieu
    October 3, 2011

    The EU’s serious problems are about more than the money it demands.

    From,1518,789355,00.html: –

    The conservative daily Die Welt writes:

    “Europe is, without a doubt, in danger. Not because the citizens of Europe don’t like the EU, but because they don’t understand it. Because they can’t even recognize it. Because no one explains what it’s good for, what form it should take in the future and how to get there, step by step. The powers-that-be only say that the European Union must exist — there is no alternative. They also warn that talking about the dangers only causes them to grow — and so it’s better to keep quiet.”

    “It doesn’t seem to bother anyone that the EU is using its own private language. … Nobody has a problem with the fact that the urgently needed rescue fund was given the clunky name of the ‘European Financial Stability Facility.’ Doesn’t anyone realize that no one understands what’s going on, that no one can even picture (the EFSF) in their minds? And doesn’t anyone realize that these words don’t sound like something worth saving, but something dangerous that would be better avoided?”

    “Democracy can have many faces — even an absolutist one. Europe’s democracies are taking on such features right now. Because so many leaders regard the European project as so titanic, they have abandoned all hope of being able to explain it to the general public. Leaders are ignoring their citizens because, hey, they’re not going to understand it anyway. … This attitude might buy time, but it gambles away Europe’s reputation, its future and its legitimacy.”

  24. Mezzo
    October 3, 2011

    It would be nice to see some comparators with other countries.

  25. John Bracewell
    October 3, 2011

    It will not have escaped many people but is perhaps worth emphasising that if the UK government was in charge of its own affairs, it would be able to set the amount spent on the EU itself in line with the perceived benefit (?). Instead it is dictated to by the EU and has to try to limit the amount spent (with little return) as one voice out of 26 other countries with very different views, the contributors (few) will want to limit the amount given whereas those benefitting will want to increase the amount since the net worth to them is then greater. The inevitable result is that relatively rich countries like Germany, France and the UK pay for the rest, which is why the EU is seen by many people as an expensive waste of money.

  26. Neil Craig
    October 3, 2011

    I tend to minimise them for the opposite reasin. EU “Enterprise” Commissioner Verheugen is on record some years ago as saying that EU regulation destroys 5.5% of continental HNP. In Britain that is about £80 billion. I do not believe that the EU Commisioner would have been underestimating the damage his fellows are doi8ng nor that this paraasitic burden has reduced in the last few years – quite the reverse.

    £14 billion is half our military budget and could arguably be worth a peaceful Europe (assuming the EU a positive rather than negative influence). £100+billion in total is not.

    (Actually this is only the annual cost – the difference between EU growth, about 2%, and world growth, 4.8% last year, robs us of the above annual value every 2 years.)

  27. Acorn
    October 3, 2011

    If I had a pound for all the differing UK budget contributions to the EU I have read.

    For the masochists, the EU 2010 financial report and accounts are available in the yellow bar at the top of the page. Try and spot the pension costs. Unfortunately this will not answer the ultimate EU pension question. That is, just how many tax payer funded pensions do Glenys and Neil Kinnock get.

    1. uanime5
      October 4, 2011

      According to this the UK had the 4th highest contribution to the EU budget. 1st is Germany with 21.2 billion Euros, then France (19 billion), Italy (14.5 billion), UK (12.9 billion), Spain (9.6 billion), and the Netherlands (4.2 billion).

  28. dan
    October 3, 2011

    “Apologists of our membership of the EU always like to minimise the budget costs to the UK”

    You, John Redwood, are an apologist for our membership of the EU.
    Call today, now, on this blog, for the UK to leave the EU immediately.

    Back it up with a principled stand that unless this happens you will resign from the Conservative Party and sit as an independent Conservative in the Commons.

    Fail to do so, and as usual, its all hot air from you ‘euro-sceptic’ chancers.

  29. Andrew Smith
    October 3, 2011

    Over all the years from 1973 when we joined up to 2008 our total payments came to £230.4 billion gross. Sorry I have not got later data to hand but as John showed it has been growing.

    Hidden Costs include additional payments to the Common Agricultural Budget, Overseas Aid, European Space Agency, Galileo satellite. From 1997 to 2004 these payments totalled £9.1 billion. The Common Agricultural Policy increases British consumer prices for food by £16.8 billion a year.

    EU Commissioner Gunter Verhuegen, said the cost of EU regulation in 2006 was 5.5% of national output or €600 billion. He said the benefits of the Single Market amounted to €160 billion. That means the costs exceeded the benefits by €440 billion.

    The former Vice Prime Minister of Holland, Gerrit Zalm stated that the cost of EU over-regulation on Holland was 2% of GDP. At least the same figure must be true for the UK amounting to at least £28 billion a year.

    Only about 10% of our economy is concerned with exporting to EU countries; nevertheless 100% of businesses have to comply with EU regulations.

  30. backofanenvelope
    October 3, 2011

    Let me get this straight. The central government is going to borrow another £800 million to give to local authorities to compensate for them not raising council tax? If they were serious about reducing the deficit they would freeze council tax and the central government grant to local authorities.

  31. Paul H
    October 3, 2011

    You will doubtless have noted Cast-Iron’s comments about the EU over the weekend, supplemented by Hague apparently stating that now was not the right time for a referendum (leading one to conclude that the “right” time is when they think they will get the “right” answer). Do you still maintain that the only reason Cameron dropped the Lisbon pledge was because it was rendered pointless?

    1. lifelogic
      October 4, 2011

      He clearly dropped it because it suited him so to do. Had he not and had he put a proper Tory agenda to the country – he would have probably had an overall majority. Then not have had the Libdems strangling him every day.

      But does he enjoy actually this strangulation?

    2. sm
      October 5, 2011

      A cynic might say he knew the ‘Constitution/Treaty’ was going to be ratified.

  32. Martin
    October 3, 2011

    I’m having difficulty reading the column marked “Thatcher” (of all things LOL).
    You mention the EU Budget is going up is the Council budget going up to? I suspect that is what he extra cash from the government is to cover.

    So we have EU, UK and Council spending all going up.

    On the subject of the EU and its reported difficulties have Mr Osborne and Hague tried any clever stuff to help out in return for sorting out the Common Agriculture Policy?

  33. Albert Hopkins Shirl
    October 3, 2011

    As that the EU is a total socialist movement then WHY should British people
    pay ONE PENNY to their bloated bureaucracy an the corruption that goes
    on with them as to
    NO ONE Wants to sign of on the accounts.
    Does that not prove what its all about and now Cameron is backing this bloated EUSSR and the corruption, as there is ALL WAYS that when there is NO DULY CHECKED AND ACCOUNTED ACCOUNTS TO A HIGHER PERSON OR GROUP.
    Talk about Dracula in charge of the BLOOD BANK with Cameron at the head of
    the socialist EU backer in Briton.

  34. Albert Hopkins Shirl
    October 3, 2011

    My father help our cousin Mr Joe Bamford with 500 pounds to buy his first factory at Rocester Staffs in 1948-9, where I learnt my trade as a metal worker in the 1960s.

  35. Mark
    October 3, 2011

    There are plenty of other ways in which we contribute to EU coffers in addition to the officially recognised ones. We pay VAT and duty on personal imports of tobacco, wine, and beer, and increasingly we are paying air travel taxes in continental airports: haulage firms fill up on the continent where they can. Large amounts of MTIC VAT fraud (in total worth some £12-13bn) are paid out by HMRC to other countries. We pay out benefits to families resident in other countries. Then there are the bailouts which appear to have been excluded from the official figures. These are just some of the money flows.

    When we add in the economic consequences of the peace, the bill becomes truly ginormous. It is chilling to find Keynes’ words from 1919 echoing today:

    Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some… Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. …

    The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance

    1. uanime5
      October 4, 2011

      According to Marx the Capitalist system will collapse when the workers can no longer afford to buy the products they produce because their employers have cut their salaries to such a low level. Given that the rich keep getting richer and the poor keep getting poorer in real terms the capitalist system will soon collapse in this country.

  36. lojolondon
    October 3, 2011

    John, I would like to point out that when the EU spends money in the UK they make the best of the opportunity to blackmail recipients. So if a bridge is built and only 5% of the funding comes from the EU, they require that a plaque is displayed to say the bridge was built with EU contributions. Often a flag is required too. If this is not done, then a ‘fine’ is levied. Also, they can chose the projects to support, so a new hospital would be left to local funds, but a new town centre or some vanity project would be funded, all with the requisite recognition of the EU contributions.

    This is a horrific amount of money to waste every year, just to be told that Spanish ships can fish our waters and that we use the wrong lightbulbs. Cameron can never justify this total waste of British taxpayers money.

    1. lifelogic
      October 6, 2011

      Indeed they take £1M waste most of it in collection and admin then give you £100 back if you put an EU flag and sign up saying how “they” helped fund the project.

  37. Jon Burgess
    October 3, 2011

    There is no logic to the scale of budget the EU demands of it’s members. They will always need greater contributions to fuel their unaudited spending requirements; this is the reality. There is no justification in seeking increasing contributions whilst domestic governments try to reduce spending. All these things are obvious to us and this alone is enough to demand our withdrawal from this expensive unhelpful undemocratic unaccountable tax raising non-entity.

    Will Cameron fight our corner and demand a reduction? I won’t hold my breathe for that.

    Imagine saving £14bn a year by not being in the looney EU, it makes you think, doesn’t it?

  38. alan jutson
    October 3, 2011

    Just listened to the Chancellor.

    Governments are looking at credit easing.
    Guess that now means underwriting Company debt.

    Government would agree more Quantitative easing if the Bank of England ask for it.
    So guess that will happen soon.

    Looks to me like more devaluation of sterling, more inflation for a few years to come, and government (taxpayers) acting as guarantors to companies as wellas Banks.
    In the meantime savers get screwed again with low interest rates promised for a number of years to come.

    Please tell me I have got it all wrong.

  39. Paul
    October 3, 2011

    This is the sort of information the public is clueless about. If they actually realised we pay £billions for unwanted and damaging regulations, unwanted and damaging laws, unwanted and damaging immigration and trade which we could get for free if we left the pointless EU then the right outcome of an in/out referendum (which we have been criminally denied) would be assured. Along with capital punishment, these are referendums that the public deserves, our political leaders are hopelessly out of touch on these issues. While ordinary people struggle to put food on the table and pay the rising bills, we can see exactly what Cameron thinks of the British people.

    1. uanime5
      October 4, 2011

      We wouldn’t get trade for free if we left the EU. The price Norway and Switzerland have to pay for being able to trade in the EEC is implementing all EU law, which they have no control over.

  40. javelin
    October 3, 2011

    The obvious point is that the EU hasn’t had their budget audited in 15 (?) years. So how can they expect to audit Soverign’s budgets if they can’t get their own house in order ?!

    This kind of duplicitious, shadowy behaviour always ends in blood and tears.

  41. Daisy
    October 3, 2011

    I was listening to a phone-in on LBC earlier today, when the annual net cost was said to be £1bn after deducting the money paid from EU funds to UK projects, and this £1bn was dismissed as negligible and something we should be happy to pay.

  42. Barry Reed
    October 3, 2011

    Surely when we are told about trade with the EU we are never told in £sterling exactly how much trade we actualy do, if we do for example £10billion in trade, but it costs £14.3billion to bellong to this corrupt fraudulent club then it is not worth belonging to the EU as being out of it would yield a profit for the UK of £4.3billion and that would go a long way to pay off our debt left by the best Chancellor in the world Gordon Brown!

    Barry Reed

  43. Bernard Otway
    October 3, 2011

    This is why the comments attributable to William Hague in yesterday’s papers are the LAST STRAW as far as I am concerned,WHAT on earth has happened to him ?, has he had some kind of REVERSE DAMASCENE CONVERSION,I can’t help but recall words like Burning Building and No Exits.This kind of thing brings all politicians barring a miniscule few like JR into disrepute,maybe the great Panjamdrums of the EU have shown him the “Presidents’
    Book” or Area 51 buried somewhere in Brussels.Someone has to play hardball on the EU issue at conference,and by hardball I really mean HARD,like my South African friend who on falling out with a very stupid son [the son’s fault entirely] CUT out of the WILL the son,BUT when the father died in a car smash unexpectedly within a year,the 500,000
    Hectare farm was left to the other 4 sons with a strict codicil that NO PART of the farm could be assigned or anything for 50 years after his death.NOW 7 years later the recalcitrant son is AN EMPLOYEE of the other 4. There comes a time in life WHEN a stand has to be taken,and with the EU the time is NOW,it is a huge issue with the voters NO MATTER WHAT DC says,remember the Question Time audience’s opinion from last week
    in Liverpool.

  44. uanime5
    October 3, 2011

    Does the increased cost of the UK’s contribution take inflation into account? At 5% inflation it’s no surprise that the amount we have to pay keeps increasing.

    Also every decision by Parliament has huge administration and compliance costs that fall on UK governments (local and devolved) and companies. If the EU is going to be criticised for increasing costs then so should Parliament.

  45. lola
    October 3, 2011

    The EU? It’s simply a self serving racket. So whadaya expect?

  46. Sue
    October 3, 2011

    “Ian Cowie, personal finance editor of the Failygraph tells us that freezing council tax, “as Chancellor George Osborne proposes to do today”, will not only save the average family £72 a year but help bring home a fundamental difference between the Coalition Government and its Labour predecessor.

    But, actually, this is not the case. Even if we were to concede the propaganda point of this being a “saving”, the announcement assumes a 2.5 percent increase in council tax. The average CT in 2010/11 is £1,439. Thus, the “savings” in 2012/13 for 5.7 million households in Band A – the largest of the bands – will be £23.98. Only the 130,000 households in the highest banded properties – H – will “save” £71.97 pence.

    And that is why we buy the Failygraph (not) – a paper which truly lives up to its motto … “never knowingly misinformed”. They simply do not realise how crap they are. Or perhaps Cowie really believes that the “average family” lives in a Band H house.”

    CONNED by the CONservatives again!

  47. Sophie
    October 3, 2011

    Greetings John,

    I am afraid I have given up on the “nearly PM” Cameron.

    Heathite at best, duplicitous at worst – he has got to go.

    UKIP for me until he does.

  48. Ferdinand
    October 3, 2011

    It is also concerning that when one department claims a saving there seems to be no fall in the total. As with councils they claim they save here, but then spend the saving there, so there is no actual saving. Perhaps the government and councils should open a specific ‘savings’ account where actual savings can reside, and more importantly be identified.

  49. Sean O'Hare
    October 3, 2011

    Pedantic I know, but you should learn how to construct a table in HTML as this one is all over the place!

  50. dan
    October 3, 2011

    I see John Redwood is censoring those who dont fall for his ‘euro-sceptic’ fakery

    1. dan
      October 5, 2011

      I offer an apology to Mr Redwood. My previous comment was not censored. My error.
      My sentiments remain unchanged though.

  51. matthu
    October 3, 2011

    What value is there to be had by gathering 100,000 signatures on a petition and in what manner can this be described as strengthening democracy?

    With both the Conservatives and the Lib Dems promising some sort of a referendum on the EU in their respective manifestos, we now discover thast there is no real point in having a referendum because … (wait for it) … we already KNOW what the outcome of a referendum will be!

    “What most people want in this country is not actually to leave the EU, but to reform the EU and make sure that the balance of powers between a country like Britain and Europe is better.”

    The sheer arrogance is breathtaking.

    1. uanime5
      October 4, 2011

      A recent poll showed that this is what most people want.

  52. zorro
    October 3, 2011

    I always find it a little tricky talking about EU contributions as there are a few different terms which sometimes aren’t fully explained or get confused with one another. It’s not always easy to find a clear exposition of the costs and benefits (though with the EU accounts not being signed off it’s not surprising). There is gross contribution, abatement/rebate, cash budget cost, and other nebulous ‘costs’ and ‘benefits/credits’….

    I think that you are including the first three here with the key figure being the actual cash cost e.g. 2012 (gross cost £16.1bn – abatement £2.8bn = cash cost £13.3bn. An interesting briefing note is attached….

    However, this does not include the money allegedly spent by the EU in the UK, or the costs imposed in the UK as a result of EU regulations. I found the following article illuminating with regards to what costs he thinks can reasonably attributed in a negative sense to the UK’s involvement in the EU…

    If this is correct, we need to see this line of argument far more forcefully advocated by Conservative Eurosceptics.

    I agree with your point in funding the freezing in Council Tax, we need to look at discretionary areas of public spending rather than yet more borrowing. As I have predicted previously, yet more QE to come….and there will be more after that too.


  53. NickW
    October 3, 2011

    This is what Barroso has to say, re the Tobin tax, which Europe intends to impose on us by force, breaking democracy once again.

    “In his “state of the union” address, Mr Barroso said the tax could generate revenues of more than €55bn (£47bn) a year. He said: “In the last three years, member states have granted aid and provided guarantees of €4.6 trillion to the financial sector.”He added: “It is a question of fairness. If our farmers, if our workers, if all the sectors of the economy from industry to agriculture to services, if they all pay a contribution to the society, also the banking sector should make a contribution to the society.”

    Mr Barroso is wrong; there is one sector of the European population which pays no tax and lives off public money extracted under duress.

    I refer to European politicians who should pay tax like everybody else, but at the moment they don’t, their incredible salaries, expenses and pensions are tax free; they rank the lowest of the low in the hierarchy of greedy parasites.

  54. Bazman
    October 3, 2011

    Some BBC propaganda tonight on Panorama. How some employers are avoid paying the minimum wage as it soars to £6.08 an hour. Leaving some especially the young, who feel they are being forced to accept low or even no pay just to get work. Imagine.

    1. alan jutson
      October 4, 2011


      Its been going on for years, and these companies can then undercut on price those companies who are attempting to work within the rules and who pay tax.

      I can only speak of the construction industry, and it is now common place to be incompetition where eastern european labour is being paid £35.00 a day by some contractors, which made it impossible to be competitive.

      I have now finished slowly winding my company down (over the last 3-4 years), and retired last year, a couple of years earlier than I wanted to, but whilst the company was still solvent with money in the bank.
      All of the workers I employed for years (and who received good rates of pay) have had to find other work in a shrinking market.

      In addition, for years both I and the Federation of Mater Builders and many other Trade associations asked and lobbied the government to reduce VAT on home improvements and maintainance and repair, to reduce the rate of VAT to 5% so those of us who paid our taxes, filled out our monthly tax returns, could compete with the cash cowboys who pay nothing, other than VAT on materials.

      It all fell on deaf ears.

      PS, An extension/repair or maintainace costing £120,000 includes £20,000 for tax, however the tax take is even higher than this, as also included is the tax rendered on the labour element in wages, and on the companies profit who are completing the work.
      Thus nearly 50% of what the customer pays is in the form of tax for maintaining/improving their house in good condition.

      Madness on any scale.

    2. uanime5
      October 4, 2011

      There’s a lower level of minimum wage for those under 21. There’s also apprenticeships, which pay below minimum wage for all age groups, and internships that pay nothing. The Government has given employers many ways to undercut minimum wage, to the detriment of employers who value their employees.

  55. Robert Christopher
    October 3, 2011

    The EU is going to cost a whole lot more if this Tobin tax is implemented!

    The EU is more than a very dysfunctional family. It is not the first time that EU legislation has been introduced by the back door to avoid Britain’s veto.

    European politicians plot to block UK veto on ‘Tobin tax’
    “In his “state of the union (sic)” address, Mr Barroso said the tax could generate revenues of more than €55bn (£47bn) a year.”

    And where is most of that money going to be found?

    “London to bear brunt of tax on finance to fund higher EU spending
    The City will bear the brunt of a soaring Brussels budget under a European Commission proposal to use financial transaction taxes to fund an extra £93bn needed for EU spending increases.”

    With the expected large reduction in British taxes going to Westminster, due to banks moving away and their reduced turnover, life will be getting much harder; especially for the public sector, which is ironic!

    CallMeDave and his team needs to do some deep thinking before the EU Referendum vote by MPs being held this year. This blindness to EU corruption and nasty behaviour towards Britain is taking its toll and “EU friendly” politicians are loosing credibility – even when they have none!

    1. uanime5
      October 4, 2011

      The entire financial sector generates less than 0.1% of GDP. Even if every financial company leaves the cost will be minimal.

      Reply: Where do you get these ludicrous statistics from?

  56. sjb
    October 3, 2011

    JR wrote: “When considering the cost of EU membership we should always look at the gross contribution less rebate [a.k.a. ‘UK correction’ = handout paid to the UK by the other 26 Member States], as this is the true cash cost. That is the amount of tax we have to raise to pay for the EU. We should also add in a much larger annual sum for the costs of UK administration and compliance of all the rules, regulations and programmes required by the EU.”

    Why then – despite facing the same overheads + contributing more to the EU + lacking the benefit of a 25% currency devaluation since 2007/8 – do France and Germany seem to do better than us?

    – – – – – – – – –
    For 2010, the top four Member States’ total contributions (in billions of euro):
    Germany, 20.7; France, 18.2; Italy, 13.7; UK, 12.1
    Source: EU budget 2010: Financial Report (published 30 September 2011) (p60 of the Report; p62 of the pdf)

    For 2010, growth rates (est.) for the same Member States:
    Germany, 3.5; France, 1.5; Italy, 1.3; UK, 1.3
    Source: CIA World Factbook

  57. BobE
    October 3, 2011

    Rome burns whilst the EU fiddles….

  58. British National
    October 3, 2011

    The Public would support cuts in Overseas Aid and EU Payments every time, rather than borrowing yet more money. This is “Cloud Cuckoo Land” economics, by the Government, borrowing £800 Million to give the British Public a sweetener and to grab Media headlines for a few days. Pure and simple “Madness” CDS ( credit default swaps) are now as high or higher than the Great Lehman Brothers Crash of 2008. Does Osborne not do his homework? An EU Bank will crash now, in the next few weeks, certainly before Christmas. The pressure signs are all there.

  59. John Maynard
    October 3, 2011

    Certain amount of naivete here (and with all who see the simple solution as just leaving the EU).

    Barroso and his minions want a Tobin tax, which might raise 50B Euros (for the Commission to waste), 80% from the City of London.
    The British Government say they will veto this, so now the Eurocracy are busy finding ways around the British veto. Calling it a VAT tax (therefore not a NEW tax) has been mooted. I don’t see how they could impose this, but anything is possible.

    Now, suppose we demanded our withdrawal, and after a lot of crises, endless talks and (no doubt) some “compensating” payment from Britain to the EU, we got our wish (and a huge dollop of long-lasting ill-will).
    The next day the Eurocracy would start planning to exclude us from their markets. A ruling that all EU financial business must be done in the EU area, would mortally wound London as a financial centre, and Frankfurt, Paris and Amsterdam would have their wicked way. Don’t expect protection from the WTO.

    The EU is, amongst other things, a giant protection racket. We are in and there is no pain-free way out (and we are talking lots of pain).
    We must preserve the veto at all costs and hope that the “internal contradictions” of the EU/Euro provide an opportunity to lessen the shackles at some point.

    1. Robert Christopher
      October 4, 2011

      John M, what are you frightened of?

      “… suppose we demanded our withdrawal …”
      We do not need to demand it! The EU only has power over us because we let it. We can just leave.

      “We must preserve the veto”
      It looks like the EU think they can get a Tobin tax by treating it as a value added tax; with behaviour such as this, why do you think that our veto has any worth?

      ” Don’t expect protection from the WTO.”
      Why not. I have seen several reports that it would protect us. Mainland Europe have been breaking their own laws, so international agreements will become more important to us when negotiating.

      We buy more goods from the EU than they from us.

      Some of our non-EU trade goes via Rotterdam, so is counted as EU trade and not non-EU trade, so we do export more outside the EU than some figures suggest. (it may even be more than 50% of total international trade.)

      “The EU is, amongst other things, a giant protection racket. We are in and there is no pain-free way out (and we are talking lots of pain).”
      I agree! Either we de-industrialise, and the weak won’t get a look in, or we get a PM with backbone!

      If the Conservatives cannot supply one, they should call an election.

      Look what has happened to our fishing industry. When our financial industries go the same way, it will be too late! The hospitals will be closing; Social Services will be loosing staff and professional engineers will need to emigrate to find suitable work.

      The alternative is to leave the EU and come to an agreed arrangement.
      They need us more than we need them. Just think, we won’t have to pay our EU taxes for a start. We will be able to make our own laws, like we used to.

      1. DaveK
        October 4, 2011

        On at least two occasions, at the conference, members of the government mentioned the “majority” of our trade is with the EU and 3.5 million jobs could be at risk.

        I wonder if Mr Jenkin would do a table with the actual figures in.

        In my view the numbers trotted our by the pro EU team are designed to be misleading. For example the >50% figure which as mentioned may include exports that are just routed via Rotterdam. Also what is the percentage of exports to Ireland (who are such close partners and traders that we stand them £8 billion security)?

        I try to base my opinions on evidence and facts.

        1. lifelogic
          October 6, 2011

          They of course include trade with Ireland in this as if that or indeed any other trade would be lost!

    2. Stephen
      October 4, 2011

      I am wondering why the commission has picked on a money raising initiative (the Tobin tax) which singles out a specific member (the UK), surely that breached some kind of principle?

      That the just do not regard the UK as ‘one of us’ or simply do not like us, seems rather too simplistic, but it is hard to draw another conclusion. I appreciate the bash the bankers approach is popularist, but this is still such a biase proposal. JR what is you understanding of how this came to be proposed?

    3. uanime5
      October 4, 2011

      80% of 50 billion Euros is 40 billion Euros.

      As the entire financial sector in the UK contributes £800 million to the UK’s GDP how exactly is the EU going to get 40 billion Euros from it?

  60. acw izatt
    October 3, 2011

    Conversative voter since 1957, shall not do again if PM ditch a referendum on EU. wish John Redwood will be the party leader in the near future,can’t wait.

  61. Robert Christopher
    October 4, 2011

    Cameron ‘weasel words’ under fire as Tories demand referendum on EU

    “Former Cabinet minister John Redwood said Mr Cameron should demand a ‘less intrusive and less expensive’ relationship with the EU as the price for agreeing to the treaty changes needed to put the eurozone on a firmer footing.”

    Thank you John, for adding your voice of experience to the argument.

  62. Norm
    October 4, 2011

    Following Norman Tebbits advice I started my own business in 1980 after twice being made redundant. I retired in 2004 with a little nest egg that I thought would cushion me for the rest of my days. Well that capital has slowly been eroded by virtually no interest, increased council tax of almost 100% and and 40% income tax on my pension. I bought a buy to let flat to give me added income but the increase in annual service charges (£17,500 this year) means I am subsidising the tenant and can’t sell because of the property crash, thats if I could find anyone daft enough to buy it from me. I am seriously thinking about finding a job to keep my head above water. So much for supporting middle England. I don’t know why I bother voting at all never mind Conservative. Well not next time anyway and there’s a lot like me.

  63. Christopher Coyle
    October 4, 2011

    We should tender to run Europe at a more effective cost than it is currently being run by Bruxelles.
    It could be a good Industry for Britain – RUNNING the EU but not IN the EU.

    That could solve a lot of our problems and theirs too.

Comments are closed.