The UK and the EU

[Puppycow]

Do the benefits of remaining in the EU outweigh the costs for the UK?

What exactly are the benefits anyway?

What are the costs?

 

[The Don]

Good question.

According to the treasury, the UK's net contribution to the EU budget in 2011 was £7.4 bn which means that we paid in £7.4bn than we got back out in payments and subsidies.

People who are anti-EU in the UK say that we could be part of a European free trade area without paying into the budget (so all of the benefits, none of the costs) this may not be true.

Other "costs" that EU opponents talk about are the costs of implementing EU employment and human rights legislation - some of us view these as a benefit.

I suppose it's almost impossible to determine what the cost to the UK would be if we withdrew from the EU. for example, all the EU workers would have to get work permits and may go home which could have a major impact on the UK economy.

It's probably impossible to calculate the costs and benefits objectively. I imagine most people start from their chosen position and construct the financial case accordingly.

 

[Dcdrac]

The UK would still have to adhere to EU regualtions, like Norway does currently, to trade with any EU member state, so it would all still be thhere but the UK would have no say at all inhow the regs are formed, jsut like Norway currently does not.

 

[Puppycow]

Good question.

According to the treasury, the UK's net contribution to the EU budget in 2011 was £7.4 bn which means that we paid in £7.4bn than we got back out in payments and subsidies.

It seems that the other countries are now asking for even more in the future.
The EU budget has become a major point of friction between the countries these days.

UK rebate under renewed attack from Europe

Britain’s EU rebate – or refund – came under fresh attack from Brussels on Wednesday, raising the stakes for David Cameron ahead of next week’s summit on the bloc’s long-term budget.

France rejects EU budget compromise

France has dismissed a compromise proposal for the EU’s long-term budget as unacceptable, further complicating efforts to win a deal when EU leaders hold a special budget summit next week.

Countries that are net contributors now want to cut the budget. But the countries that are net beneficiaries want it to increase.

The UK would still have to adhere to EU regualtions, like Norway does currently, to trade with any EU member state, so it would all still be thhere but the UK would have no say at all inhow the regs are formed, jsut like Norway currently does not.

Trade agreements could be worked out, as trade is beneficial to both parties in any case. Is there any particularly onerous EU regulation that Norway is forced to adhere to? It seems to be like they have the best of all worlds. If they joined they would asked to pay money to the southern countries and the eastern countries.

 

[Puppycow]

More on the upcoming budget battle here:

All Set For Big Budget Brawl

Feuding looks set to bedevil a summit called next week to agree on the European Union’s seven-year budget, with a fresh compromise proposal dismissed by key players just hours after it was put on the table.

On Wednesday, the European Commission pleaded for everyone to “come together in a true European spirit” during the summit. At the same time, it appeared to turn up its nose at a new proposal to knock off extra billions from the 2014-2020 budget– catchily known in Brussels as the Multi-Annual Financial Framework.
. . .
The U.K. has made the most strident demands for a budget freeze and is largely supported by Germany and others, while another large group of countries from Southern and Central Europe is passionately calling for allocations for growth-enhancing projects to be protected.

“The latest numbers being circulated don’t go far enough,” said British Deputy Prime Minister Nick Clegg during a visit to Paris Wednesday, pointing out that overall the budget would still be rising with inflation – an unacceptable position at a time of budget cuts at home, he argued.

On the other hand, since countries like Spain, Greece, Portugal, Ireland and Italy are suffering so much right now, one could argue that it is time for the countries that are relatively well off to step up and help even more.

 

[Dcdrac]

Norway currently has to abide by all EU regualtions to trade with EU member states.

Also it is part of the EEA and has to abide by its rules and regualtions

EEA European Economic Area - An economic trade area taking in the EFTA countries and the EU countries.

 

[The Don]

The Eurosceptics seem to want their cake and eat it. They would like free access to the European markets on favourable terms but they don't want to be bound by the human and employees rights laws. They can't seem to understand that if the UK was out of the EU then the EU countries may not want to deal with us.

 

[Giz]

They can't seem to understand that if the UK was out of the EU then the EU countries may not want to deal with us.

We buy more from the EU than we sell to the EU. It is in their interests to come to a deal.

 

[Nessie]

.....



On the other hand, since countries like Spain, Greece, Portugal, Ireland and Italy are suffering so much right now, one could argue that it is time for the countries that are relatively well off to step up and help even more.

The problem is that those countries regarded themselves as in the EU's poor and wanted the subsidies. Then the EU grew, they were no longer the poorer countries and were being asked to cough up. Since the likes of Greece does not even bother to cough up for itself, it is not surprising they were not going to do it for anyone else. Ireland is the only country out of that group which has really accepted responsibility for their actions and is making a concerted effort to rectify its economy. Italy is just corrupt and Spain and Portugal are in between.

They should be well off with the size of their economies, why should we pay up because they do not act responsibly in managing their economies?

 

[The Don]

We buy more from the EU than we sell to the EU. It is in their interests to come to a deal.

Depends on whether we can buy whatever it is from someone else and whether we have the upper hand in the relationship.

For example, I assume we will continue to buy electricity from France and they will continue to name their price. UK subsidies of European-owned businesses will continue to buy materials from Europe on terms set by the parent organisation.

 

[Tomtomkent]

There are considerable benefits. As well as trade, economic stimulus and community ties, there are a lot of stuff we dont tend to notice and do take for advantage. These include:

Human Rights protection. The European agreement is the basis of the HRA, which despite people complaining is not there to protect criminals and keep illegal migrants in the country.

Health and Safety issues that have tightened standards in a lot of areas. Sometimes with the UK getting up to standard for Europe, sometimes to get ahead of the curve.

Workers Rights. The European Working Time Initiative alone is a worthy improvement to the way a lot of workers are treated.

Oh, and to make sure these rights are not infringed, there is the additional layer of protection offered by the European courts.


So yes. Worth the money.

 

[spin0]

Do the benefits of remaining in the EU outweigh the costs for the UK?
What exactly are the benefits anyway?
What are the costs?

See for example here: http://blogs.ec.europa.eu/ECintheUK/the-uk-and-the-eu-budget-the-facts/

Arguably UK's net contribution in 2011 was € 7.255 bn. That's the biggest number you could come up with. But it depends on how you calculate. For example the previous number includes customs and duties that UK collects on behalf of EU, and arguably those are EU's monies to begin with and should be subtracted.

If you exclude those then UK's net contribution was € 5.57 bn (see this table). It's about 0.32% of GNI and about 0.8% of UK public spending.

UK is fourth largest net contributor after Germany (9 bn), France (6.4 bn) and Italy (5.9 bn). Per capita UK's net contribution was € 89 per citizen which is 11th highest among the 11 net contributors.

According to UK government estimates the single market brings in £30-90 bn a year into the UK economy.


European Commission’s proposal for EU budget ceilings 2014-2020 is about 1% of EU's GNI each year:

In absolute values the budged has grown bigger since new members have joined (Bulgaria and Romania during 2007-2013 budget period) yet it has remained about the same percentage of GNI. Croatia is expected to become the 28th member state in 2013.

 

[Croydon Bob]

Is there any particularly onerous EU regulation that Norway is forced to adhere to? It seems to be like they have the best of all worlds. If they joined they would asked to pay money to the southern countries and the eastern countries.

It's far more complicated than that. When I worked in central (UK) Govt, I was involved in drawing up some new legislation that impacted on trade across the EU. Not only did the UK get a role in drawing up the new rules so that we were not disadvantaged, but we got exemptions for the historic UK way of doing things. So an estimated £2billions-worth of British equipment could continue to be used in Europe and moved across Europe legally. If we had not been in the EU the new rules would have outlawed all old UK equipment within the EU and British industry would have had to buy new German equipment to trade and compete with the other EU countries within the EU.

This was just one small area, so £7b (or €5.57 bn or whatever) cost a year is probably peanuts compared to the value of the advantages. Someone was claiming yesterday that failure to build a third runway at Heathrow Airport was costing the UK £14billion, an unlikely figure, but indicative of the big numbers that are involved in international trade.

There are thousands of funny little exemptions and protections that have been negotiated by the UK Govt thanks to being in the EU. One that I happened to hear about was that Scottish Whiskey is allowed to be moved around the EU in wooden barrels because it is the traditional way. No other country's whiskey or spirits is so allowed, it is against Health and Safety legislation. Leaving the EU would destroy the Scottish Whiskey industry.

I assume that Norway gets none of these advantages.

 

[spin0]

For sense of scale UK pays less to the EU than it does to Wales, Scotland and Northern Ireland. Here's UK's regional public spending net contributions (2004/5) to
Scotland: £10.8 bn
Wales: £8.5 bn
Northern Ireland: £6.4 bn

And to EU in 2011: £4.5 bn (=€ 5.57 bn, depending on how one calculates)

Source: Regional contributions to UK public finances 2004/5, Oxford Economics. I know it's dated and nets are difficult to calculate (all arguable in some ways). I used them here just to provide sense of scale in a comparison.

 

[Jack by the hedge]

Scottish Whiskey is allowed to be moved around the EU in wooden barrels because it is the traditional way. No other country's whiskey or spirits is so allowed, it is against Health and Safety legislation. Leaving the EU would destroy the Scottish Whiskey industry.

I can't see how having to transport whisky in aluminium or stainless steel barrels would 'destroy' the industry. In fact I rather assumed it was almost all bottled before it ever left Scotland. It's matured in wood, of course, just like many other alcoholic drinks worldwide. I'm sure there's plenty of Norwegian Aquavit that's transported around the world in wooden barrels before being sold into the EU.

BTW, in the context of traditional ways, it's traditional to refer to the Scottish product is 'Scotch' and not to put an 'e' in whisky.

 

[Nessie]

.....

Per capita UK's net contribution was € 89 per citizen which is 11th highest among the 11 net contributors.

.......

Is that right? Here the UK per head is 7th out of all 27 EU members (to get the link click on the tile Net by population)

http://news.bbc.co.uk/1/hi/world/europe/8036097.stm#start

and here overall the UK is the 2nd highest net contributor (to get the link click on the tile Net Contribution)

http://news.bbc.co.uk/1/hi/world/europe/8036097.stm#start

 

[spin0]

Is that right?

Yes. And like I said there's many ways to make these calculations.

Here the UK per head is 7th out of all 27 EU members (to get the link click on the tile Net by population)
http://news.bbc.co.uk/1/hi/world/europe/8036097.stm#start
and here overall the UK is the 2nd highest net contributor (to get the link click on the tile Net Contribution)
http://news.bbc.co.uk/1/hi/world/europe/8036097.stm#start

Includes relevant disclaimer: "However, this calculation can be done in different ways."

In that particular calculation UK's net contribution seems to have been about € 3.5 bn in 2007 (was € 4.7 bn in the calculation I linked).

You can find more information about different ways to calculate the net contributions with respective results here: http://ec.europa.eu/budget/biblio/documents/index_en.cfm

 

[Sunstealer]

The Eurosceptics seem to want their cake and eat it. They would like free access to the European markets on favourable terms but they don't want to be bound by the human and employees rights laws. They can't seem to understand that if the UK was out of the EU then the EU countries may not want to deal with us.

Ill make it extremely simple for you.

We'll trade together. You be Britain and I'll be Europe.

Now I'll give you £8 worth of goods today and then you can give me £10 worth of goods tomorrow. We'll repeat this trading of goods ad infinitum...oh hold on I don't want to deal with you any more.

So now you are £2 up and I'm £2 down. Every 2 days. Why would I want to stop trading or dealing with you when I make money by selling you stuff and buying stuff from you?

The idea that Europeans are going to cut all trade off if the UK either leaves the EU altogether or remains in the free-trade area is simplistic naivety at best.

China has no problem trading with the EU. So why does any other country have to be bound by EU employment law in order to trade?

It would seem that you are the one who doesn't seem to understand.

*edited to add - £10 and £8 are arbitrary figures. Just google european balance of payments for figures.

 

[MarkCorrigan]

Ill make it extremely simple for you.

We'll trade together. You be Britain and I'll be Europe.

Now I'll give you £8 worth of goods today and then you can give me £10 worth of goods tomorrow. We'll repeat this trading of goods ad infinitum...oh hold on I don't want to deal with you any more.

So now you are £2 up and I'm £2 down. Every 2 days. Why would I want to stop trading or dealing with you when I make money by selling you stuff and buying stuff from you?

The idea that Europeans are going to cut all trade off if the UK either leaves the EU altogether or remains in the free-trade area is simplistic naivety at best.

China has no problem trading with the EU. So why does any other country have to be bound by EU employment law in order to trade?

It would seem that you are the one who doesn't seem to understand.

*edited to add - £10 and £8 are arbitrary figures. Just google european balance of payments for figures.

Primarily because of the favourable trade status. We might buy more from the EU than we sell to them won't mean that Europeans will cut off alltrade, but they will reduce it.

Further to that we have the free movement within the EU. If we leave, we lose that. We lose that, we lose the Polish, Bulgarian and other Eastern European workers that do all the jobs in the british farming industry that Brits simply do not do. We lose those, our slowly improving farm industry will tank. Further to that, the immigrant population of this country contributes a great amount to the UK economy. We lose them, we lose out.

Add to that we will lose a large, LARGE number of workers rights and industry regulations. As it currently stands, the EU sets a minimum, if a nation goes further than the minimum they don't have to alter their laws, but if they are under they do. This has led to much improved safety for workers and consumers. In some cases the UK will not change at all because our regulations are further than the EU set minimum. In others we will likely go backwards.


Then of course you lose all the added benefits. The ability to trade with China, the US or other nations as a large block for payment is a huge benefit economically. There's the fact that we woul lose the EU healthcare coverage that means if you get injured or sick in France or Germany or Spain you will get treated. There's the freedom of movement and freedom of working.


As Tomtomkent said before, there are a huge host of reasons being in the EU is preferable to being outside of it, but there are sadly a large number of people in this country who are led around by the nose by some of the despicable anti-EU rags like the Daily Mail who hear the "we pay more" bit and either ignore the multiple benefits or try to cast them in a bad light "We're losing powers to Brussels" being a firm favourite even though it's almost never true.

 

[Croydon Bob]

I can't see how having to transport whisky in aluminium or stainless steel barrels would 'destroy' the industry. In fact I rather assumed it was almost all bottled before it ever left Scotland. It's matured in wood, of course, just like many other alcoholic drinks worldwide. I'm sure there's plenty of Norwegian Aquavit that's transported around the world in wooden barrels before being sold into the EU.

BTW, in the context of traditional ways, it's traditional to refer to the Scottish product is 'Scotch' and not to put an 'e' in whisky.

Well, I've made it obvious that I'm no expert on "Scotch". But my second-hand understanding is that it was absolutely vital to get the wooden barrel exemption. For some reason unknown to me they do move it around in the wooden barrels.

As I said, this is just one of thousands of exemptions that various bits of industry in the UK have as a result of being in the EU. These are all things that British industry wanted and asked for. That we won't get if we are outside the EU.

Of course we would still trade with the EU if we left the EU. On EU terms, with the goods carried in EU lorries and on EU trains and ships, paying EU taxes.