EU-In or Out?

Should the UK be in or out of the EU?

Attending a meeting of EFDD (http://www.efdgroup.eu/) in Carlisle I picked up 2 leaflets: Big Spenders and the Truth About Trade Beyond the EU. The references in Big Spender were in parts academically weak with sources from newspapers and any information put out by respective campaigns is likely to be biased so as to sway the audience into the “right” opinion.

One of the most basic points about EU membership is costs and benefits. An attendee at the meeting explained he had never been able to obtain data on a cost benefit analysis despite trying for 17 years. Perhaps therein lies part of the problem.

The House of Commons Research Briefing (www.parliament.uk/briefing-papers/sn06730.pdf) on the economic impact of EU membership on the UK (2013) confirms it is difficult to do a cost benefit analysis due to their subjective nature. Costs do not just include those that are clearly identifiable but also the cost of EU legislation on businesses. There is a fact sheet at (news.cbi.org.uk/…/factsheet-2-benefits-of-eumembership-outweigh-cost...)

The effect on business very much depends on how large the business is and the extend to which the company wields power with the European Commission.Unfortunately the fact sheet does not include the reference to the original sources. Also the voter is more interested in the benefits and costs to them rather than taking a business perspective. The reality is some firms benefits whereas others lose out and the CBI represents large businesses rather than small or micro businesses. When considering the benefits of the access to market in the EU one should consider whether we are a net exporter or importer to the EU and the importance of the EU economy to other world markets. Statistics can be found at (http://ec.europa.eu/eurostat/statistics-explained/index.php/The_EU_in_the_world_-_economy_and_finance).

Webb et al (2015) (9www.parliament.uk/briefing-papers/SN06091.pdf) attempt a cost benefit analysis within their more recent paper. They cite the Institute of Economic Affairs data of the costs being between 3 and 4% of GDP compared to the CBI data of benefits of between 4 to 5% GDP. This means making an argument based on data becomes very difficult given the differences that exist between sources. They also cite Open Europe data which said the cost of 100 most burdensome regulations was £33.3 bn a year (openeurope.org.uk › Intelligence › Britain & the EU). Trade with the EU would still occur even if Britain were to leave.

Growing markets such as those in India and China are important in terms of trade.

The UK budgetary contribution of the UK was £6.9 bn (estimated) in 2012 which is equivalent to 0.4% GDP. The UK has been a net contributor 39 out of 40 years of membership. In real terms £401bn has been paid in and £134bn net of receipts. A graph in the research briefing report http://(www.parliament.uk/briefing-papers/sn06730.pdf) illustrates the contributions, receipts and rebates. The majority of the G20 Governments were running a deficit in 2013. That includes the EU which is treated as one area. Only Saudi and South Korea are not running a deficit. The UK’s current account balance with the rest of the world was -121.7 bn Euros far larger than any other of the 28 countries in the EU (http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Current_account_balance_with_the_rest_of_the_world,_2004%E2%80%9314_%28%C2%B9%29_%28EUR_billion%29_YB15.png).

Germany by comparison runs a healthy surplus of 219 bn euros in 2014. Looking at the data illustrates that within Europe there are considerably different trading positions. No country has a deficit any where as large as the UK in its current account balance with the rest of the world.

In 2014 the UK’s net contribution to the EU was 9.8bn Euros (Webb et al, 2015). As this is  a government source I suggest it’s worth wading through this report.

The accounts have not been signed off for the last 20 years. Were this a situation with a business we would all be concerned. Why should the EU be any different?

The bottom line surely is is it worth paying such a large amount to belong to a club where laws are not set by the elected MEPs but the Commission so why do we bother to vote and belong to a club where there is a clear democratic deficit and a lack of financial benefit? EU- In or Out? What do you think and why?

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