“Britain sends £350m to Brussels each week [implying £18 billion each year].” (Leave)
“Britain would save just £5.29bn [each year] by leaving the EU” (Remain)
The questions of what we contribute to the EU budget, and what we would save by leaving, are slightly different.
The UK sent around £14.4 billion to the EU in 2014, or £280 million a week, but the potential saving if we hadn’t been a member would have been much lower than that, because we get money back.
£350 million a week is not what we pay
The claim that the UK sends £350 million per week to the EU is wrong.
This is what we would send to the EU if it wasn’t for the UK’s budget rebate. The rebate is effectively an instant discount on what we would otherwise be liable for—the ‘gross contribution’. In 2014, the gross figure was £18.8 billion.
Since it was negotiated in 1984, the rebate on the UK contribution has meant that the UK actually pays less than this hypothetical amount.
The rebate can’t be changed in future without the UK’s agreement.
The Treasury and the European Commission have both confirmed to us that the actual payment is the gross contribution minus the rebate.
The actual payment is different from year to year, but last year’s was £250 million a week
The size of the payment varies from year to year.
It was as high as £14.5 billion (£278 million per week) in 2013, and as low as £8.7 billion (£168 million per week) in 2009, according to the official EU Finances report published by HM Treasury.
The figure for 2014 was marginally lower than in 2013, at £14.4 billion, while the projection for 2015 is that it will be £12.9 billion.
This is £248 million per week, or £35 million per day, not £55 million a day as is sometimes claimed.
The UK gets money from the EU budget as well, so the savings from leaving would be lower
This doesn’t exactly match the Treasury figures, but it’s not far off.
Based on this, the Treasury says that ‘net contributions to the EU budget’ were £9.8 billion that year. This is deducting the amount of the rebate and money coming back to the public sector from the gross payments.
The Treasury also says that the UK private sector received payments as well, such as research grants. These were estimated in 2013 at £1.4 billion, but the Treasury does not show these in its table.
If these additional payments are also deducted, the net contribution would come down to £8.4 billion in 2014.
Neither the money that goes back to public sector nor the private sector is fully within the government’s control. If we left the EU we might choose to spend it differently, or spend the same amount ourselves on farmers, poorer regions and the rest.
So if the UK left the EU it would almost certainly save less than the whole £14.4 billion amount we sent there in 2014. Exactly how much less depends on how much EU spending the government would want to keep in place.
The claim that the amount we could save is as low as £5 billion is speculation
The Remain side goes on to say that if the UK wants to retain the same access to the EU single market as Switzerland, it would have to pay an additional £3.71 billion for the privilege.
Subtracting this from the £9 billion it gives as the net contribution results in the claimed figure of £5.29 billion in savings.
This number is speculative because there is no direct basis for it, according to UK in a Changing Europe Fellow Iain Begg.
Switzerland, like other European countries outside the EU, does make payments linked to its access to the Single Market.
The Remain camp claims that these are 38% of the UK’s per head.
But there are no figures on Switzerland’s contributions more recently than 2009, according to the House of Commons Library.
So it’s hard to say whether or not this is the case, and we don’t know whether a newly departed UK would want or could get a deal at all similar to the Swiss one.
The numbers in context
Mostly because of the rebate, the UK pays the least of all member countries as a share of Gross National Income—a standard measure of the overall prosperity of an economy that is a close relative of the better known GDP measure.
The EU budget is around 1% of EU GNI.
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.