Just another Brexit blog.
Cost of membership
Recent figures from the leave campaign talk about the cost of Britain being in the EU. It costs around £240 each they say, based on the membership of £18 billion per annum they say.
They have a point. That is what British membership costs up front.
It is the wrong figure, it is too high.
But they are missing a big point, Britain has a rebate of 5 billion, negotiated in the mid 1980s by then Prime Minister Margaret Thatcher.
It is not as though we bay the 18 and get 5 back. The rebate is applied up front. We only pay the EU £13 billion. The leave campaign figures are clearly wrong.
But even this is the wrong figure, it is too high.
The British government gets money back. This is payments for farmers and to support poor areas of the country. This public sector receipt was £4.5 in 2015.
This leaves a nett figure of £8.5 billion, under half the amount the leave campaign are saying it costs to be in the EU.
But this figure is wrong, it is too high
£6 to 7 billion
The reason that is high is that there are also private sector receipts from the EC. This does not come through the government, so finding a figure is difficult.
So I will take the example of tertiary education.
There is the right for EU citizens to study in any country of the union, and the EU funds research. Both these benefit Britain. In short the EU are subsidising British universities.
Education is only one area, there are many more. It is difficult to say what the private sector receipt is, but one estimate shows that the cost per household, rather than the £240 each that the leave campaign are quoting, using the wrong figures, would be around £90 each, probably lower.
We still are a nett contributor to the EU, but even this figure is too high. It is based on the idea that if we left the EU we would no longer contribute.
Norway and Switzerland
Norway and Switzerland are not in the EU, but have access to the single market. The Norwegian system is lauded by some as the way Britain should go. The problem is that countries with access to the single market have to pay the EU for the privilege, with no voting rights for the privilege, any agricultural products exported to the EC as subject to the Common Agricultural Policy as well.
So if we leave we will still have to pay. What that will be will have to be negotiated. What we eventually save will be the difference between what we now contribute and what we will have to pay. It is possible wi will end up paying the EU more nett by leaving than we now contribute as a member.
The leave campaigns figures are clearly misleading.
But enough of the leave campaign, what have the remain campaign been saying?
The cost of leaving
£4,300 per household
The cost to each household in Britain for leaving the EU will be £4,300 a tear by 2030 says the treasury report. While that it will cost is probably right in the short term, the figure is clearly very wrong. It is way too high.
I mention short term because the long term cost or benefit of leaving is not known, that depends on trade agreements which are yet to be negotiated.
But there are two big problems with the figures, that are based on dividing the Gross Nation Product (GNP) of the country by the number of households in 2015.
The first big problem is that income per household and GNP are not the same thing.
The second is that projections for 2030, in the future, should not use the number of households in the past, as the treasury figures have done.
£2,800 per household
GNP is the total value of all final goods and services produced within a nation in a particular year. In Britain this is about £66k per household. That is nowhere near the average income per household, which is about £44k. The Treasury figure of £430 is out by 50% of the figure it should be, without factoring in the number of households.
The number of households used was the figure from 2015, but it should have been a projection of how many households it is estimated there will be in 2030. Which brings in the sticky question of immigration. Without the free movement of people within the EU what will the net immigration from the EU be to a non member Britain? (It will not be 0). How will this affect immigration from outside the EU?
So the treasury figure is made by dividing a number which is way too high with another that is unknown. It cannot be accurate.
What we have from both sides of the debate are statistics that take some figures that can be verified and presenting them by ignoring other figures, and hoping people will not look too closely.
To take some facts and ignore others is how conspiracy theories are built. Which is fine for Science Fiction TV shows like the X Files or the entertaining novels of Dan Brown but not OK for building economic plans.
So what we have, in effect, in the Brexit debate is a choice between two conspiracy theories. The choice of the British people will not be an easy one. Both sides have been very selective of what makes up their truth. Both have been economical with the truth.
Which set of liars are you going to support on this issue?