I was in the pub eavesdropping on a group of men whose discussion went like this.
“We shouldn’t pay an EU exit bill, we already pay in more than we get out”.
Which in straight numbers is correct.
We are due to pay £17bn, but we get a rebate and money back for poorer areas….but we still pay £8.6bn a year (£24 million a day) more than we get back.
And this is pretty much the argument Remain made. Or to paraphrase “we don’t spend £350m a week you lying bastards its only £148m” ….which is hardly a compelling pro -remain argument.
The argument should be. We pay £24 million a day to have open access to the biggest market in the whole world and which accounts for 44% of our trade. £24 million gives us membership of the Single Market, which enables our products to be recognised across the EU without the need to meet 27 different national legislation. This cuts costs for our businesses and enables multinational marketing and sales in which UK companies can sell products or parts to every country in the EU. This accounts for 12% of our trade.
£24 million a day also gives us membership of the Customs Union which means that rather than trying to forge our own trade deals against the mega economies of China and America, by acting as part of a block we can meet them on their own terms, with the technical, institutional and financial ability to defend ourselves in international courts. This enabled a rapid and effective block on Chinese steel dumping which was going to wipe out the UK steel industry. The independent business body the CBI confirms that membership of the EU gives us access to more markets, preferential access, and quicker trade deals. The recent EU – Canada trade deal is estimated to bring £1.3Bn annually to the UK…which we will lose with Brexit.
To simply equate direct money in with direct money back misses the much larger picture. The economic hit by leaving the EU is predicted to be – between a drop of 3.8% – 7.5% GDP with the worst case scenario of WTO rules after 15 years or a drop of 2.5% after 2 years.
A 2.5% drop is £48.5bn a year or nearly 6 times our EU contribution! That £24 million a day brings in £110 million a day in profit.
Now isn’t that better than “we don’t spend £350m a week you lying bastards its only £148m“?
WTO Rules – Leaving the customs union.
CBI – 10 facts about EU Trade Deals:
Effect of Leaving the EU:
Treasury analysis: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517415/treasury_analysis_economic_impact_of_eu_membership_web.pdf
Modelling events: The short term economic impact of leaving the EU. https://www.niesr.ac.uk/sites/default/files/publications/dp461.pdf
Size of the UK economy in 2016:
Calculations: UK economy 2016 = £1940 bn x 2.5% (the predicted decrease in GDP after 2 years) = £48.5bn drop.