Vote Leave lies (sigh)Posted by Dan Greef & filed under EU.
Brexit has been a large part of the headlines for so long now that it is surprising to hear that the campaigns only officially started last week. One sound bite that particularly captured the headlines was by Labour MP Gisela Stuart when she said “…£350 million a week goes to Brussels…I would suggest we spend it on the NHS.” (BBC Radio 4 15/4/16)
That’s a significant sum of money and understandably attracts one’s attention! Looking at the Vote Leave website it appears once again – “We send about £350 million to Brussels every week. This is about half the English schools budget, four times the Scottish schools budget, four times the science budget, and about 60 times what we spend on the NHS cancer drugs fund… If we vote to leave, we will be able to spend the £350 million we send to Brussels every week on our priorities like the NHS, schools, and fundamental science research.” (VoteLeaveWebsite)
However there are two questions that spring to mind. 1) Is this accurate when taking the rebate and other subtractions into consideration. 2) Just because Stuart thinks the money should go to the NHS I hardly think Gove or Johnson would consider this an option.
So I did some reading and here is the truth about the actual amount we spend on the EU and what we get in return. The BBC came to the rescue and have done the calculations for me!
Of the original £350 million, £74 million is subtracted as the rebate. So £276 million goes to the EU. From that amount £88 million returns to support our poorest areas in regional aid and to support our farmers. So after this we are paying £188 million a week. We also get back £27 million in scientific research funding leaving the real figure we pay to the EU standing at £161 million per week. Now this is still considerable, however very different from the initial figure that has been bandied about by Vote Leave.
Now let’s look at the rest of this money and what it most likely would be spent on if we leave the EU. Well this is where the unknown unknowns lie and I wish the vote leave would stop pretending that it has a crystal ball. According to a Financial Times poll of over one hundred economists “more than three-quarters thought Brexit would adversely affect the UK’s medium-term economic prospects, nine times more than the 8 per cent who thought Britain’s economy would benefit.” (Financial Times 22/2/16)
Macro economics is not a spreadsheet recording exercise of income and expenditure like a household budget. Both consumers and producers are affected by their economic environment and will invest where they have stability. Brexit would naturally unsettle this and no one knows for how long.
Finally if we did want to still trade with the EU post Brexit, this would cost us money at the expense of having any say over how the EU works. Parliament did research into this in 2013 and investigated the UK becoming a member of the European Free Trade Area (EFTA) meaning we would have access to the free market without being a full member. The report compares two EFTA member countries: Norway and Switzerland. It discovered that they pay the EU, on average – £106 (Norway) and £53 (Switzerland) per person. This is compared with the UK which currently pays £128 on average per person per year. (Parliament 1/7/13)
The amount we would pay is unknown, however the figures presently don’t look all that different but being a member of the EFTA puts us at the outside of the decision making table. As Dr Jóhanna Jónsdóttir stated to the Foreign Affairs Committee (25/4/12)
“… being in with the outs while trading freely in Europe comes at a price. It means paying to administer and police the single market while the in-crowd makes the important decisions about how it works. For a noisy nation accustomed to a place at the table and having its voice heard, that could feel like a very un-splendid isolation”
The economic claim that we would save £350 million per week is not only inaccurate, it is a headline designed to catch our EU cynical eye. We don’t know what the full economic impact of Brexit would be, particularly as we do not even know; post Brexit, what our trade deal with the EU would look like or how much it would cost. Like most of the EU referendum debate this is but another sound bite to appeal to one of the most basic of our human instincts- the fear that we are being ripped off, whilst bypassing the facts. I’m sure we have a great deal more to come!