A high price to pay

IT costs the British taxpayer more than £1,700,000 an hour in up-front payments to belong to the European Union – making it one of the mostly costly and wasteful clubs in the world.

Since Britain first signed up to the Common Market in 1973, our MPs have given close to £200 billion to the unelected commissioners in Brussels.

That is the equivalent of four years total spending on the National Health Service (at 2002 prices).

To put this figure in perspective, just £1 billion would pay for:

• 222,000 hip replacements
• Or 46,893 nurses
• Or 38,782 teachers
• Or 34, 585 police officers.

Surrender

Rather than defend Britain's interests, Tony Blair in December 2005 agreed to a new 2007-2013 budget which surrendered an additional £7.1 billion of the British rebate to Brussels.

At the time, he said this was necessary to: 'Transfer wealth from rich countries to poor countries and to invest in Eastern Europe'.

But the government's own figures show that inequalities in wealth within Britain have grown under Labour - so, wouldn't it have been better to keep the money in Britain to spend on our own poor, rather than to send it to Brussels to subsidise wealthy French farmers?

More and more to the EU

Rather than declining, Britain's contribution to the EU is constantly increasing. The latest official accounts show that our net contribution to the EU in 2005 was £ 6.1 billion, an increase of 20% on the £5.1 billion our MPs gave away in 2004.

Our gross contribution in 2005 was a record £15.0 billion, up 15% on the 2004 figure of £ 13.1 billion.

This is equivalent to £289 million per week, or £41 million per day, or £1.72 million per hour.

Hidden costs

These figures are for the direct payments we make to belong to the European Union. But there are other, hidden costs that we have to pay. These make the bill much, much higher. Which may be why this and previous governments have refused to provide the voters with a detailed breakdown of what it really costs us to belong to the EU.

For that we have to rely on independent academics. A recent report by the Bruges Group, for instance, estimated that the total – direct and indirect – cost of belonging to the EU is close to £52.5 billion.

This additional cost is made up of the burden of regulation, the impact of subsidies on prices, and the effect of hidden tariffs.

The burden of regulation

According to Global Britain's Ian Milne, the rock-bottom cost of EU regulation on the British economy is £6.3 billion. A more reliable estimate, according to Milne, puts the true cost closer to £20 billion.

Milne has also calculated the cost of the Common Agricultural Policy, which accounts for the bulk of EU spending. While he puts the rock bottom figure at £7 billion, he thinks a more accurate figure is closer to £15 billion.

These telephone number sums are hard to comprehend – just like most things to do with the European Union – but they amount to huge transfers of British taxpayers' income to unelected bureaucrats in Brussels. This might not be so bad, if the money were spent well.

Fraud and waste

But the reality is that much of this money is either wasted or lost in fraud.  For the last 11 years the independent Court of Auditors has refused to ratify the European Union's accounts because they could not be sure they were accurate.

If the EU were a private company, the board of directors would now be behind bars, the business wound up and the creditors paid off. But this is the European Union and little, if anything, can stand in its way.

Even now, after countless financial scandals, the EU does not have a simple accounting mechanism for recording assets and liabilities correctly.

A catalogue of errors

In the 2004 accounts, for instance, the number of errors was so high that the auditors could not vouch for spending streams that covered 93 per cent of expenditure.  Under the common agriculture policy, for instance, the auditors found that structural funds totalling about €70 billion were affected in some way by errors.

According to Conservative MP and chairman of the Public Accounts Committee Edward Leigh: 'Estimates of fraud (in the EU) range from between 7 per cent and 10 per cent of the total EU budget.' That means 'it could have been as high as almost €10 billion for 2003 alone.' The Commission, of course, puts the figure much lower at about 2 per cent, but even that is almost €2 billion.

'Whatever the exact figure, the problem of fraud is immense. The situation has surely gone on long enough,' Leigh concludes.

'In 2002, my own Committee published a scathing report on a notorious fraudster, a farmer called Joseph Bowden, who claimed against the common agricultural policy for different crops on the same piece of land and went on to give fictitious co-ordinates for some of the fields for which he was claiming.

'If those claims had been examined by experts, or anyone with a map, it would have been discovered that the fields were apparently in Greenland, the North Sea and the Norwegian sea. He received a 30-month jail sentence as a result and new controls were imposed, but at the time he got away with it because controls were obviously lax in the then Ministry of Agriculture, Fisheries and Food'.

Related articles

See Ian Milne's excellent study A Cost Too Far, explodes many of the myths about the risks we would face if Britain were to pull out of the European Union. Click here

Gerard Batten's useful pamphlet 'How Much Does the EU Cost Britain?' draws heavily on the work of Milne and others, but presents a clear and cogent analysis of the price we pay: Click here

Go to

All quotes from Westminster Hall debate Wednesday, 26 January 2005: Click here

Official sites

Office for National Statistics: Click here