Britain is paying through the nose for its membership of the EU, and is having to bail out the eurozone to boot. That’s if you believe Daniel Hannan, the eurosceptic MEP.
Luckily for us, the claims in Hannan’s latest piece in The Telegraph are misleading.
Take first this contention: “… the £350 million that Britain sends to Brussels each week”
It is true that Britain’s notional contribution to the EU was £17.8 billion (page 14) in 2015, or around £340 million a week. However, the UK receives a £4.9 billion rebate (page 14) in the form of a reduction to its EU budget contributions. Margaret Thatcher fought hard to secure this when she was prime minister.
We questioned Hannan by email why he had not deducted the rebate. His reply was: “It’s normal to count the gross rather than the net contribution”. But the UK never sends (page 34, A.10.4) the notional amount to Brussels; the rebate is deducted first. The gross amount we actually “sent” to the EU in 2015 was £12.9 billion, or around £250 million a week.
But even using this £250 million figure would be misleading, if it was intended to suggest Britain would save that much by leaving the EU. This is partly because the EU also sent the government £4.4 billion (page 14) last year to spend in the UK, mainly on farming and regional aid. It also gives money directly to the private sector – in particular for research. In 2013, the last date for which the government has published figures, this amounted to £1.4 billion (page 14, 3.7). Finally, we are committed to spend 0.7% of our national income on official aid for developing countries. When we calculate our total spending, we include our share of EU aid (£816 million in 2014).
If we left the EU and maintained our support for agriculture, the regions, science and developing countries, we would only save around £6.3billion, or £120 million a week – or less than £2 per person per week. And that’s before taking account of any money we’d probably still have to pay the EU if we wanted to have privileged access to its market, as Norway does.
Now look at another of Hannan’s contentions: David Cameron “was obliged to pledge £850 million to bail out Greece. And then, three months after that, he was obliged to pay the balance of the £1.7 billion ‘prosperity surcharge’.”
It is true that Greece received a loan from an EU fund, the European Financial Stabilisation Mechanism, in July 2015. But a deal was done which meant that non-eurozone members would be fully compensated (see para 5.15) in the event that Greece did not repay its loan. They were provided with collateral to guarantee this, and a law was passed ensuring the same treatment (see Article 1) if a similar situation arose in future. Hannan’s response was: “That’s why I said ‘pledge’ not ‘pay’”. Given that Britain was never on the hook for any risk, Hannan is playing with words.
As for the £1.7 billion “prosperity surcharge”, the UK’s rebate also applied to this. As a result, the actual sum demanded was £850 million (page 5, para 9). What is more, this payment wasn’t linked to the euro crisis. Hannan’s reply was: “I never claimed that the prosperity surcharge was linked the the euro bailout. They were two separate things.” However, by mentioning it in virtually the same breath as the bailout to Greece, Hannan gave the impression that it was linked to the euro crisis.
This isn’t the first time Hannan has been wayward with his facts. Our editor’s blog pointed out misleading statements he made in October. He has since corrected them, albeit only partially. We hope he corrects his latest errors too.
This article was previously published on 7 Jan. 2016 on hugo-dixon.com
Edited by Hugo Dixon