The claim
“We already send £350m to Brussels each week.”
Robert Oxley, Vote Leave
The background
Numerous Brexit campaigners say EU membership costs the country £350m a week.
We’ve FactChecked this claim before and found it wanting. And now the Institute for Fiscal Studies (IFS) has made an important new intervention.
It is likely to remain one of the key questions for Britain as the in/out referendum on 23 June looms.
Just how much money are British taxpayers handing over to Brussels?
The analysis
The figure of £350m a week is based on official Treasury figures for Britain’s gross contribution to the EU budget for 2014.
That’s £18.8bn, or about £360m a week, which represents about 0.6 per cent of national income, about 14 per cent of total UK health spending for 2014, or £252 a year for every person in the country.
But concentrating on this gross figure ignores the fact that a good deal of this money flows back to Britain in various ways.
First there is the rebate that Margaret Thatcher’s government negotiated in 1984. This reduces Britain’s 2014 contribution from £18.8bn to £14.4bn.
Then there are the billions that flow back directly to the British government. This money is mostly spent on payments to farmers, although some of the poorest regions of the UK also benefit from EU funds.
This brings the net payment down to about £9.8bn in 2014. But it isn’t the whole story.
Non-governmental bodies like universities and businesses receive money from the EU too. Most of this comes via research grants paid out under the Horizon 2020. British researchers have tended to do well out of this funding.
The IFS calculates that non-governmental spending like this reduces the net UK contribution to EU coffers to £5.7bn in 2014 (it is estimated to rise to around £8bn in subsequent years).
All these adjustments slash the contribution per person from £252 to £89.
And the IFS thinks that even this could be too high, depending on how you deal with other items of spending: aid to non-EU countries, revenue from trade tariffs and administrative spending.
Changing the way these things are worked out could reduce the cost of EU membership to the UK to around £60 per person.
To put this in perspective, it has to be remembered that Britain is still a net contributor, no matter how you crunch the numbers.
The IFS suggests that 17 of the EU’s 28 member states are net “givers” while 10 – mostly in Eastern Europe – are “takers” (Spain comes out exactly neutral).
It’s a reminder of the fact that the EU’s finances are fundamentally redistributive: resources are diverted from richer to poorer member states.
The verdict
Leave campaigners are unlikely to stop using the figure of £350m a week, despite the IFS conclusion that using the gross figure and ignoring the UK rebate in this way is “not sensible”. The real net figure is slightly debatable but certainly much lower.
When we raised this with Leave campaigners last year, the suggestion was that the real issue was control: after Brexit, Britain would be able to decide what it spent the money on, rather than having the spending allocated by Brussels.
It’s possible to argue that the gross contribution minus Britain’s rebate – £14.4bn in 2014 – would be available to spend on whatever UK governments wanted in the event of a Leave vote.
But the IFS says this only works if two conditions are met. First, the UK would have to negotiate a relationship with the EU after Brexit that did not involve a financial contribution.
This could be tricky. If, like Norway, we wanted to continue to have access to the EU’s internal market, we might have to pay for the privilege.
Second, Britain only gains financially if Brexit does not adversely affect trade, jobs and growth, which is a big “if”.
[Update: In the video we refer to Norway making a contribution to the EU budget. Norway’s mission to the EU estimates an annual cost of 866m euros (£684m). Norway has a population of about 5 million, so this works out at about £135 per person. Note that this is a gross, not net, figure, so is not directly comparable to the various net figures estimated by the IFS. The Norwegian government says: “It is not possible to compare net payments between those of an EU Member State and those of a Non-Member state.”]
The fact check just aired had no spoken words which meant my husband who is blind had no clue what was being said. Please do not do this in future, but speak the wiords.
I recommend you listen to Radio 4 or World Service “More or Less” programme.
So even if £60 per head contribution, rather than £252, which equates to almost £4.5bn not £18.8, WHAT DO we get for that?? WHAT ARE we subsidising to the tune of £4.5bn? WHY?
Can C4 FactCheck tell us? Because to do so would be to paint the whole picture.
Rob, you must know what we get. If you don’t you’re either being disingenuous or ignorant of what EU membership is about. If all you listen to is Leave propaganda, that wouldn’t surprise me. At the very least it’s about having access to the EU single market with all the benefits and cost savings that go with it. There’s a lot more we benefit from than trade benefits of course, and brexit would mean losing them or having to renegotiate them. And brexit would mean we still have to pay for access to the single market, just like Norway.
The principal concern is why we are required to pay this protection extortion payment simply for the right to trade with our nearest neighbours. We were assured in 1975 we were joining a European Free Trade Area but surreptitiously and stealthily this became a closed political union; with the peoples’ consent never sought. Finally it has been, but with caveats – the EU think they are presenting Britain with a fait accompli relationship which they’ll make too scary to Leave however judging from the present mood of the people they will find to their cost they are greatly mistaken – naturally that has to be subject to a fair and honest referendum and I must say many doubt that is what we will get.
Money, money, money… oh how we worship this false god…
When you get your annual P60 do you say
“I’ve paid £50k in tax”
or do you say
“I’ve handed over £50k in tax but actually I got £35k back because of govt services, roads etc?”
Same thing.
As for
Changing the way these things are worked out could reduce the cost of EU membership to the UK to around £60 per person.”
does that include the extra costs due to VAT, green taxes imposed by the EU, the burden of regulation etc etc ? If not why not?
You cannot include the benefits and not the costs without being biased.
I’m a bit fed up with the moans about ‘green taxes’. Is it not our duty to avoid global warming?
Paying taxes does not “avoid global warming”, assuming that man is responsible for “global warming”, and that “global warming” is even taking place (as the satellite figures clearly shown has no “warming” has taken place for the last two decades).
Green policies based solely on the demonisation of CO2 have no basis in empirical science and result in the destruction of UK industry – steel in the most recent example.
I do like to pay tax and enjoy the knowledge that I have contributed to the things that make the world a better place.
I’m concerned about the UK’s security, not just about the fee we pay to belong to this unelected government, they dictate that we must house highly dangerous criminals, and that we must pay for benefits to be sent abroad, that our NHS can be abused by all incendiary ! Im voting out!
The neutral approach to this post is very refreshing. It can appear we are damed if we do and damed if we don’t. It’s the enforced controls and legislation which makes me think brexit .. The financial situation will sort itself like the financial crashes and banking fiasco but who has the say
I have been self employed for 27 years and not really gained any uk government financial help only EU money helped me – so what does that say ?
Less red tape more control but EU or Westminster – we can’t stay like we are …. But who will stand up and not sit on the fence and sort the harmonious balance
Hi John when we are told about the amount it cost us to be in Europe has your fact check taken into account the amount of VAT that we pay to Europe.
I think this is a brilliant article/blog for anyone and everyone to read, because the main thing I’ve heard through ; interviews with the public, conversations with friends and general here say, is that people don’t really know the facts to make their decision. My opinion is that the whole reason we joined the EU under Margaret Thatcther was to progress as a nation and leaving could be a massive stall or even regression. Another reason people want to leave is due to ‘control’ having very minimal control over what we can do as people and as a country by leaving the eu, is a massive price to pay, having ‘control’ is not always a good thing. In the article I was pleased to see what I already thought, that the UK is a giver in terms of aid to non EU countries. This is a vital asset that we have as a country, yes we do have a lot of problems as a nation that we have to take care of, some of which I agree should be taken care of first, however our ‘problems’ are considerably smaller when compared to famines, war torn and broken countries in the east and Africa. The recent controversial relations in the Tory party; such as, Panama papers, the PM’s tax, John wittingdale mp, are incidents in which people will look at them at base a decision like the referendum solely on these incidents, having not grasped or even looked at the facts. People need to look at articles like these in order to make their decisions, and not be swayed by newspapers like the daily mail, scaremongering politicians and opinions, but rather base their decisions on facts.
I feel the video makes an unfair comment in that it says Norway pays the EU £134 per Norwegian person however this is an unfair comparison as the UK population is at least 12 times the size of Norway’s. So to insinuate that we’d pay a similar amount is wrong.
Thanks Mike – see “update” above re Norway.
The leavers assertion that this 350m could be used for NHS is rubbish unless of course we intend to destroy our farming and fishing industry!
See you re-united the 32 Counties there.
Well spotted, sir. Grandma ni FactCheck is spinning in her grave…
A very interesting anylisis of the facts. I’ve always believed that we get more out of the EU than the the “Leavers” would have us believe. I like the way that the monies are distributed to other member states that are poorer and need the help of the other more wealthy member states.
To put this in perspective – based on some data in the Guardian (admittedly from 2012) http://www.theguardian.com/news/datablog/2012/dec/04/government-spending-department-2011-12. The fact-checking here is to decide whether the EU costs the same as our entire Crime & Policing budget, or whether it costs the same as our entire Crime, Policing, other Home Office activities, the entire court system and Ministry of Justice budgets put together.
In either case, aren’t both of those numbers monumentally huge? Fundamentally the point still stands: we won’t be paying into Europe and the considerable savings from that can be recycled elsewhere.
If you think that other countries will stop buying our goods/services or that we will stop buying theirs as a result of the referendum – that’s a whole other kettle of fish…
Still took many what’s ifs.. If we vote to remain the gov will casually continue business as usual without challenging any of the costs or the scale of vanity projects the eu cherry picks to support.
Money comes in
Money goes out but no accountability whatsoever,.. That is breathtakingly arrogant that successive govs appear rather happy with.
If we vote no I think the institutions eu / finance/ regulations will make the English pay for their decision and in the short term mark life harder and more costly but that will be out of spite rather than through economic judgement or need.
Yes the eu does send money back to but the finance routes are hidden, the recipients are unknown and the benefits incalculable.
And I still don’t know the name of my mep or what they achieved or what have been paid for during the last decade or if they even bother to learn a n other language.
I suspect not.
On the other hand I met a ukip wanna be the other day who was so breathtakingly ignorant and racist that I’d vote any way I can to keep her out!!!
If we vote brexit it will send fantastic shock waves through Europe and make then change.
They eNt and need our money and that’s why tey are lining up to keep us.
If we vote to stay its business’s as usual – Happy days only for the unknown mep!
Who I still don’t know exactly what they do or vote on or how or what etc.
It might be prudent to also add, if I’ve understood its workings correctly, that the Horizon 2020 grant’s “demand” like for like investment. That is to say, in order to qualify for a 1 million Euro grant the claimant must also provide assurance of privately raised funds or investment to the tune of 1 million Euro’s. There’s always a caveat! :-)
Sorry Ron: this is simply not true. H2020 funds a lot of the research in UK universities and many of its programmes consist just in funding which does not need to be backed by any other institution (it still needs an institution, and people doing the administration, but even this can be partially paid on the grants). [This is also to reply to one who was saying “we do not know who gets this money”: well, in general we do]
Your FactCheck stated that it costs Norway £134 per person for the privilege of staying in the single market. Your report attempts to draw some comparison between our present sum of £89 per year and the higher figure exacted from Norway in exchange for access to the single market; however, this is an entirely misleading analogy, since Norway has a population of approx. 5 million, as opposed to the UK’s 64 million, so naturally the cost per household will be far greater. Channel 4 should try harder, or risk accusation of bias and spin.
Thanks for the comment, Kevin. I have updated the text with a note on Norway. You are right to say that Norway has a much smaller population than the UK, so the cost per person is relatively larger.
Relatively? The EEA EFTA states normally fund their participation in EU programmes and agencies by an amount corresponding to the relative size of their GDP compared to the GDP of the whole EEA (proportionality factor). The EEA EFTA states participation is hence on equal footing with EU member states.
So, with 4.9 times the GDP might we expect 4.9 times the bill? The UK population is around 12.4 times that of Norway, so assuming our bill would be 4.9 times that of Norway the cost per person would be £52.58… less than the £89 per person this video claims we currently pay after deducting the rebates.
Let’s be honest the big German car producers will still want to sell their cars to the UK. Along with other big manufacturers of white goods.
The best cards are held by us and the EU isn’t that big a market that we couldn’t find trade in other emerging economies.
Game on I would say for an exit.
Wow. The UK does around 50% of its outgoing and ingoing trade with the EU. To gamble on leaving is a stupid idea.
What is the link to Sir Tom Hunter’s report reported in yesterdays programme?
. Thanks
Money doesn’t ‘flow’ back, it’s ‘determined’ by unelected bureaucrats once they’ve taken their cut for administration!
Then there’s £7 billion ‘net’ left, predicted to be £9 billion by 2020.
House of Commins Library
Hi Sarah,
Just wanted to reply to your comment about “determined by unelected bureaucrats…”
I see this argument in many comments.
If you have a look at the decision mechanism, the truth is far from this:
About half of the budget goes back to the member states’ farmers. This decision was made not by unelected bureaucrats, but voted by member states (your government also) and the EU parliament. The member states have quite some freedom at how they want to distribute this money among their farmers.
“Taking their cut” – administrative cost is about 6 percent of the total budget. This includes buildings, paying for salaries, infrastructure, etc. 94 percent is paid back to MSs or paid for EU programmes.
(almost) All decisions have to voted on by the EU parliament and the Council (made up by member states). These are all either directly or indirectly elected bodies.
Hope this helps…
Farmers like Iain Duncan Smith and the proprietor of the Daily Mail: https://www.theguardian.com/commentisfree/2013/jul/01/farm-subsidies-blatant-transfer-of-cash-to-rich
Most people are woefully ignorant about polititions, local Councils, UK parliament and EU. Most don’t know who their local Counciller is let alone MP or MEP.
How many can make an informed choice in the EU Referendum ?
FACTCHECK tries hard to present the facts regarding the EU….Problem is, its complicated and people prefer things to be simple.
In the end, it will come down to people’s prejudices.
One thing is for sure, if we exit the EU, our politicians won’t be able to blame EU red tape anymore.
If we stay in, we might stand a chance of reforming what we don’t like about it
How much do Norway send to the EU for access etc. My research tells me that is around a billion per year.
I would love to understand the real number.
Unfortunately this is not about the numbers !!!!!! It is all based on emotion
Maybe Factcheck would be more believable if Channel 4 didn’t receive EU funding. Another mainstream British broadcaster with a bias towards the EU.
The Commission has decided to approve the new funding arrangements for
the independent British television station Channel 4. It has also
approved two UK schemes for supporting the production of television
programmes in two minority languages, Welsh and Gaelic.
Channel 4 is to be given a financial safety net guaranteeing it a certain
advertising revenue. The intention is to avoid the danger that head-on
competition for advertising with Channel 3 (ITV) might dilute the quality
of its broadcasts. The Commission considers the measures to support TV
programming of quality and in minority languages as fully in keeping with
the Community’s broadcasting policy.
http://europa.eu/rapid/press-release_IP-91-632_en.htm
At some point we need to ask ourselves this: Is economic self interest good enough reason to determine how we should vote in this referendum? Is that the only thing people in UK can afford to care about? This is not a vote about the next UK or even EU budget, it’s about our future. Yet IN+many reporters believe it’s most important turning this debate into a numerical/balance sheet exercises?! If people chose their destiny throughout our history based on WHAT THEY CAN SEE AT THE MOMENT on cost/benefits, great inventions would not have been made, dictatorships would not have been overthrown. If we are so failure and risk averse, we would probably live but that’s just that. And maybe that’s good enough for some people, I don’t think that’s good enough for everybody.
It is debatable whether or not the Uk will be better or worse off if it leaves the EU. But the issue is – should the UK elected government have full control of the UK public’s money, or just partial control? My other concern is border control and immigration, both of which I have heard little about, including Channel 4 news. There seems to be a definite lack of control over the movement of people from one country to another, including those who have serious criminal convictions. But I want the Brexit campaign to answer one question – I live in NI which would have the only land border with the EU if we left. How will the government stop people from other EU countries coming into NI from Eire, and on to the UK mainland?
How did you manage to include Ireland in your infographic about the UK?
Totally agree with Rob Cook above. The only glimmer of hope is that if you don’t know who your councillor, MP or MEP is then you probably don’t vote either.
Brexit demanded facts. No good crying because the facts prove your bigotry wrong.
You refer several times to “contribution per person”, but I can’t see a definition of this. Is it per adult or per every single woman, man and child?
Apart from all the money talk, do we want to be overrun by thousands more,
our infrastructure is under great strain,we are not taking a leap into an
abyss,we are a great nation,I want to be governed from within UK ,
we freed europe from tyranny three times,I say out.
You used the phrase “all incendiary”.
I am voting No, this is not just based on the fact that we give billions to be in the EU it is the fact of immigration, the problem I find with the EU is that the countries that it incorporates, I feel that the countries like the UK who have a better standard of living are there to support the other countries who are not, and sadly there is a lot more of them in the eu, there residents flood our borders, take our non skilled jobs from uk citizens, which I have witnessed first hand, I worked for a manufacturing firm for 5 years when I first started the factory employees where all UK long term employees and when I left they where all agency polish workers, the English had all been made redundant!! The situation is just going to get worse if we stay, especially if turkey joins. The other problem is child benefit, I do not understand why they should be entitled to benefits, especially child benefit for a child that does not live in the UK, but the UK citizens that have worked hard and earn a good wage are not entitled!! They talk about not being able to trade with the EU, there are 169 countries in this world, 28 of them in the EU (including our selves) that just 16.5%, so we still have another 141 countries to trade with. I say we come out, use the money on our NHS, Schools and look to investing in our business and trade. After all we are a small island compared to the rest, how many more can we squeeze on?
Observing this debate from Ireland, the UK’s nearest neighbour and fellow EU member, I was somewhat surprised to see the graphics of this video (viz. in particular 38 to 50 seconds in) showing Ireland annexed in full into the UK once again. FactCheck indeed!
It’s been brought to my attention that the population number used in this video doesn’t tally with any other known figures.
You seem to be 9% out on the population figure ? Can you explain? I’d like a credible answer because it just looks bad when both sides can shout “deception” :(
Hi Carl – all calculations are as per the Insitute for Fiscal Studies, as stated: http://www.ifs.org.uk/tools_and_resources/budget-european-union
I’m going to double-check with them re population estimates.
One analogy could be in, when paying your council tax, and being presented with a statement in which the Council sets out a breakdown in the way some of your tax is spent; with say; X% on policing, Y% on Education and because you received these two benefits in a tangible form, you consider these expenditures as rebates.
This is the reason for the £350 million a week is quoted. The money we receive back, from the EU has clauses and conditions attached, as to what we spend this money on…exactly like the council tax in Policing and education.
Surely it can only be a rebate/refund if it were our choice as to how this money is spent. But as with the Council tax scenario it’s not ours to spend.
A clear video and text but can you please show in addition what percentage the NET UK payment to the EU bears to the UK annual budget. I have been saying it is in the region of 1% or less. You say the gross contribution is only .6% so the net transfer must be even lower.
What is clear is that the net amount of money transferred by the UK to the EU is tiny as a percentage of the UK’s annual budget, and well worth it in view of what we get back in terms of zero tariffs and pass-porting arrangements for our financial services sector.
I hope you can add the net percentage to your text. I don’t know why Remain does not make more of this. Every time a Brexiter mentions £350 billion, Remain should respond “less than one percent of our income!”, and put this on the side of their battle bus.
Can anyone give me the definitive answer as to whether the UK will still need to pay the 350 million a week to the EU, even if we are out, to remain in the single market?
No, in short. But it’s likely there would be a fee. Norway, for example, pays a fairly substantial fee as well as agreeing to the Free Movement rules, so it’s likely that this would be the basis for negotiation.