How much does the EU cost the UK? Plus, dog years
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What is the main topic discussed in this episode?
Thank you for downloading More or Less from the BBC. This is the half-hour edition of the programme, first broadcast on BBC Radio 4 on 10 May 2013.
Hello and welcome to More or Less, the programme which smites the dragon of dodgy data with a shining sword of statistical straight-talking. This week we run our slide rule over military suicide statistics, Richard III's relatives, and we unveil... The more or less dogulator. But first, the UK independence party UKIP wants the United Kingdom to withdraw from the European Union. That's not the official policy of any of the established political parties, but perhaps the voters have other ideas. UKIP made substantial gains in recent local elections, winning more than 140 seats and averaging a quarter of the vote in the wards where it was standing. UKIP's As with any political battleground, numbers have been pressed into service as weapons.
A key objection to staying in the EU is the cost. It's about £7 billion, according to the government's figures, or £150 billion, according to UKIP, who tot up the price of things such as extra paperwork for businesses, lost jobs and what they call benefits tourism. Lord Lawson, most famous as the father of one of the country's most loved celebrity chefs, but who also apparently has some relevant employment experience, says the economic gains from leaving the EU would substantially outweigh the costs. Deputy Prime Minister Nick Clegg says three million jobs would be at risk if the UK left. So what are we to make of all of this? I've been speaking to Ian Begg, Professorial Research Fellow at the London School of Economics.
Well, the budgetary cost is, in principle, the simplest. And yet, even if you look at the budgetary cost, how much it costs the Chancellor of the Exchequer every year for us to be part of the European Union, even there, there are different ways of interpreting it. As an order of magnitude, it's an average of about six or seven billion pounds per year in net terms. And net terms in this context means that we pay in more, but we receive from it. So you look at the balance between the two, and that's the figure that comes out.
Off the top of my head, that is about £100 a person per year, roughly. So that's one way of thinking about the cost of being part of the EU, which is effectively our membership fees, I suppose. But there must be many, many other potential costs and benefits. Has anybody tried to add them up?
Well, various people over the years have made attempts to measure the net cost to the UK or net benefit to the UK of being part of the European Union. My view on this is that it's a methodologically almost impossible task because you have to make a huge range of assumptions and each of your assumptions will tilt the final calculation one way or another. So it's no surprise that if you look at people who are pro-Europe, they tend to find a positive figure. Look at those who are anti-Europe, they all tend to find a negative figure. The reason for this is that you have to make assumptions about what would happen in the absence of being part of the European Union. So to take one example, we trade heavily with the European Union.
Roughly half of British exports go to other EU countries. If these other countries were to impose some kind of barrier, then we would presumably export a bit less to them and that would be bad news for the workers of Sunderland who make Nissan cars or the workers of Derby who make Toyota cars. What we don't know is in the absence of the EU exactly what the trade regime would be. So you're making an assumption about what the alternative position is. And I could go on with example after example of this sort, which demonstrates just how difficult it is to arrive at a correct cost-benefit analysis. Does this actually matter? Are there costs, but we just don't know what they are? Well, there will be costs, because there are some things that are great in Britain.
The famous Working Time Directive tells the workers of Britain that they should not normally work more than a 48-hour week.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–10:26
2
How much does the UK actually pay the EU in net budget terms?
10:26–14:05
3
Can you reliably add up all economic costs and benefits of EU membership?
14:05–23:03
4
Where does the 'three million jobs at risk' figure come from and is it credible?
23:03–27:53