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Analysis

One more time: No, we don’t pay £350 million a week

by Sam Ashworth-Hayes | 21.09.2017

The campaign is over, the bus has been bought and repainted by Greenpeace and still Boris Johnson can’t let his £350 million lie rest in peace. The UK does not send that sum to Brussels. It does not lose control of it. Promises about taking it back for the NHS are built on sand.

The grain of truth at the centre of this idea is that £350 million was the UK’s expected notional weekly EU payment in 2015. That number fell to £327 million in 2016. But this was not what we paid over. Thanks to Margaret Thatcher, the UK receives a special discount – the “rebate” – on the sticker price for our membership. This money, some £75 million a week, never leaves the UK. It stays in the Treasury’s coffers, under our control, to be spent as we wish. The actual amount we sent the EU last year was £252 million.

The rebate, too, is under our control. It is not given to us on a whim. It is written into the set of formulae that determines EU budget contributions, which cannot be changed without the unanimous agreement of every member state – giving us a veto over any attempt to scrap, reduce or in any way change our rebate.

In no sense do we send or lose control of £350 million a week. But promises that Brexit would allow us to spend an extra £252 million a week are also false. Indeed, we will have less money to spend, not more. This is partly because much of the money we send to the EU comes sluishing back to Britain; and partly because Brexit will damage the economy and so cut the amount of tax coming into the government’s coffers.

The EU gives the government £87 million a week to spend mainly on farming and regional aid; and another £19 million to our private sector, mostly for research. Moreover, we count £18 million in EU spending against our official foreign aid target. So unless we are willing to cut funding for farmers, poor regions of the UK, science and foreign aid, half the money we send to the EU will vanish in new public spending.

But this is not the end of the story. The Office for Budget Responsibility calculates that Brexit will damage the public finances by £292 million a week by 2020. Once you take this into account, the government will have £164 million a week less to spend.

We were promised a Brexit that worked for the NHS. What we’re going to get is one that costs an arm and a leg.

Edited by Hugo Dixon