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Editor’s blog – Time for a cost-benefits analysis of UK’s membership of the EU

By Dean Carroll

As the one-dimensional but resonating UKIP message gains traction in Britain with its emphasis on Brussels red tape and cheap immigrant labour holding back the United Kingdom’s economic resurgence, surely it is time that the UK government commissioned a thorough and independent cost-benefits analysis on European Union membership. Even if UKIP’s estimated cost of £51m per day is taken as fact, this is just crude maths. And many would argue with the numbers. It is noticeable that UKIP has never commissioned its own detailed research. In addition, such brutalist calculations fail to take into account the increased trade and gross domestic product growth that arguably comes along with membership.

In fact, the British government speculates that UK business is boosted by between £30bn and £90bn as a result of the European single market. But with such a large margin of error, these digits are as unfathomable as those emanating from UKIP. We need some reliable data if we are to elevate the debate above Eurosceptic versus Europhile scaremongering. The coalition’s ‘government audit’ just will not cut the mustard. People will not put faith in the figures and UKIP will claim it is simply the ‘dead hand of Westminster and Whitehall’. A clean skin from outside the administration would add gravitas and credibility.

At the Jean Monnet Memorial Lecture 2013, I had the pleasure of speaking on a conference panel alongside former UK trade minister and chief executive of BP Lord Simon – a numbers man if ever there was one. He claimed that out of the annual UK government spend of £700bn; just £11.8bn went to the EU. But the net UK contribution to Brussels stood at only £5bn once the supranational grants back to Britain were taken into account, said Lord Simon. Meanwhile, the French contribute £18bn gross of the EU’s annual £120bn budget and the Germans some £19bn.

“I think the UK electorate should be made more aware of the marginal nature of the EU net contribution,” said Lord Simon. The £5bn “membership fee” represented good value when it came to “such indivisible geographic challenges as climate control, defence, control of cross-border criminality, immigration, jobs and inward investment” – he argued.

Going further, he called for the £5bn figure to be left in “the admin column” of government accounts “where it belongs” – adding: “The fantasy that we can go it alone in economic terms is, I fear, just that. Let us not shrink into insularity. Let us follow the great Victorians who balanced a worldwide commercial drive with a spirit of openness to ideas and people from around the world. It is a marginal cost to the UK to have a real say in an existential option for a European future. As Yogi Berra would say ‘when you come to a fork in the road – take it’.” Still, this is but one man’s opinion. It is an argument that can be countered without firm evidence to back its hypothesis.

With the British Conservative Party in the middle of a breakdown, UKIP capitalising on the lack of economic data backing the case for membership and the moribund Liberal Democrats and Labour stance – Britain could conceivably exit the EU in the next parliament. This is the reality staring into the face of the UK government if it fails to convince citizens of the validity of membership. And without some rock solid facts on the financial benefits, the antis will simply end up in the usual shouting match with pro-Europeans over the ‘huge costs’ of being in the European club.

Therefore, British Prime Minister David Cameron and his Lib Dem deputy Nick Clegg ought to show some backbone. Why not commission a truly independent and comprehensive cost-benefits study now before it is too late? At least then, the debate may become a little more nuanced than ‘immigrants taking our jobs’ and ‘Brussels red tape destroying entrepreneurial spirit’, or conversely ‘the UK will be irrelevant as a global player outside the EU’ and ‘one million British expats in Spain will be forced to return home’. Let us get some perspective on the issues. For that, we will need legitimate statistics that cannot be argued against. Otherwise we risk the sort of synthetic debate that tainted the British referendum on the Alternative Vote. Have we forgotten the lessons from that debacle already? It was only three years ago. Lift your gaze Messrs Cameron and Clegg, an obvious solution is there before your eyes. It really is not the conundrum you are making it out to be.

Dean Carroll is editor of Policy Review. Follow him on Twitter @poljourno and follow Policy Review @Policyrev

Comments
  1. For an independent cost-benefit analysis of UK membership of the EU, see here:
    http://www.regents.ac.uk/files/regentsreport2013.pdf

    Regent’s University commissioned independent academics and practitioners to provide accessible, informed, evidence-based analysis, outlining the costs and benefits for each policy area of a changed status in the relationship between the UK and the EU. The report seeks to answer scientifically the question of what the UK stands to gain or lose from withdrawing from the EU.

    Comment by Mikaela Gavas on February 26, 2014 at 4:30 pm
  2. You just don’t get it do you Dean Carroll. It is not just the financial cost of being in Europe that we are so against. Trade will certainly continue with Europe as they need our trade every bit as much if not more than we need theirs. What people are absolutely sick to death of is all of the other intrusions into our lives the EU is having. We are a small island yet our population has increased by a massive percentage in the last 10 to 12 years. Our schools are flooded with children who speak very little English and the indigenous British so often cannot get brothers and sisters into the same school, yet alone the school of their choice. Our social services have been plundered to the extent that people who were born here and worked hard all of their lives are having to wait years longer for their promised State Pensions. The health service is at breaking point in some areas with people having to wait many days before they can see a doctor. Our housing stock has been soaked up by immigrants, our roads are clogged up and now it is planned to concrete over our green belt in some areas to accommodate the housing shortage . Most of our laws are no longer made by our elected ministers, our prisons are overrun with foreigners who do not respect our values. In short we want our country back and I certainly don’t care if the country would be slightly worse off financially if we left the EU, (although most unlikely), it is the quality of life that matters so playing around with the figures will not change the way people feel. I am sick of being classed as a second class citizen in a country that both my grandfathers and father fought to keep free from outside domination.

    Comment by Mike on November 5, 2014 at 1:27 am
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