COSTS

By far and away the biggest lie in this debate is the statement made by BREXIT campaigners on the 15th April that the EU costs Britain £350 million a week. This is a blatant, bare faced lie and proves they will do anything to influence this debate. Further demonstrated by the fact they have plastered the statement all over the crimson flanks of their battle bus as it trundles across the country,

By far and away the biggest lie in this debate is the statement made by BREXIT campaigners on the 15th April that the EU costs Britain £350 million a week.

'EU membership benefits us to the tune of around £210 billion a year, and around 4 million jobs supplying both goods and services (directly and indirectly) are dependent on servicing this arrangement; the benefits therefore easily outweigh the costs.'

Perspective
You may still be thinking that it’s a huge amount of money to pay, and it is, but not when put in context. The cost, minus the subsidies and rebates, equates to around 1.3% of public spending (so 1.3p for every £1 of tax you pay) and yet the benefit equates to around 13% of Britain’s Gross Domestic Product (GDP) - this is the ratio that economists look at to assess a country’s economic strength and resilience. Given the value it’s peanuts and probably doesn’t even come close to the House Of Common’s weekly Gin bill.

Trade and jobs

But we wouldn’t just lose all that trade on exit would we? No, but there’s no question it would have an impact (there’s clarification on this in the TRADE section of this website as well as a deeper examination concerning the misinformation regarding our exposure to the Eurozone). Likewise it would have an impact on jobs. However, as with the trade issue, no-one knows what the impact might be because it hasn’t happened yet. There are models of course, but the economic models from both sides vary so much they are effectively useless. Not to mention of course that as no country has ever left the EU we would be in completely uncharted waters. It’s a bit like trying to predict what the weather will be like in Grimsby next year at around tea time.

BREXIT – the cost

And what’s the cost of exit? Who knows? BREXIT campaigners certainly don’t. On this basis when they suggest that money paid to the EU could be used to fund the NHS it’s based on little comprehension of what the costs would be when balanced by the benefit of maintaining EU membership – more likely they are choosing to ignore it for the obvious reason that if our economy goes down the pan after exit it has to be propped up by taking money from the treasury’s coffers.

What about the cost of having to pay some of the subsidies that the EU are currently paying back and of course the cost of re-establishing new trade agreements with the 27 member states? Many important industry figures have warned of this, not least the World Trade Organization’s head, Roberto Azevedo. His belief (and he should know) is that the cost of establishing new trade agreements on exports would cost us £9 billion in tariffs and on imports, £4 billion. So not only would we not save money, it would cost us more money than our current membership. Even if you disagree with the head of the WTO’s figures any adjustment might only get you close to parity, so why would anyone consider it is a risk worth taking? (2)

Easy to see then how that £136 million a week would disappear into the ether; and do you know what would happen if by some undiscovered and miraculous fiscal shenanigans we did maintain a surplus? It would be spent on MP pay rises no doubt.

Let’s be clear; The NHS will NEVER see that money, and if you believe it would you’re a fool. Remember the Government could choose to spend more money on the NHS now but uses any and every excuse not to. BREXIT campaigners use of the emotional attachment and concern the nation has for NHS is reprehensible; it’s based on fairy tale economics that bear no resemblance at all to the real world..

‘We send the EU £350m a week – let’s fund our NHS instead!' They know it’s a lie, and everyone else with an ounce of intelligence does too; but despite being told that the figure quoted is obviously misleading the public they continued to circulate it in a paid for Facebook advertising campaign before they were forced to withdraw it. The intention behind this is obvious; once the ‘costs’ earworm had burrowed its way into people’s consciousness’ it could create the foundation for their opinion. Once people form an opinion on something they know little about they rarely look at counter arguments; just one fact, even if it proves to be totally unjustifiable, is often the only thing needed to allow them to make their decision. They then put it to one side and get on with the other stuff that’s more important to them.

It’s like a herpes virus that sits in their blood stream and resurfaces every time they are forced to think about the subject again; one swift application of the BREXIT bullshit ointment stops the blister forming and off they go.

I know this is true as I have spoken to enough people who were fooled by this dastardly plan, and still believe it, to know that the BREXIT costs ‘nudge’ has worked in more cases than it should have done.

You might have seen this campaign on FB? It was linked to a free competition offering a £50 million cash prize (the equivalent, they said, of what the EU costs Britain every day). All you had to do was register and predict the results of some footie matches; anyone getting all the results of the matches right would win the prize, and if no-one did, the closest runner up would win £50,000 instead. I had to smile at the headline; ‘Anyone can win our £50 million prize.' No they can’t! The competition isn’t like a lottery where someone will win it, they could only win it by successfully predicting all the results correctly – so not by any stretch of the imagination could just ‘anyone’ win. Putting it into perspective, the odds of hitting the jackpot is equivalent to you correctly guessing the mobile phone numbers of the next two strangers you meet in the high street.

So let’s be clear; that figure is the gross amount - the amount Britain never actually pays. The truth is that once you take account of the various subsidies and reliefs we receive from the EU the ACTUAL cost is around £136 million a week, just about 40% of the amount detailed on the BREXIT Bus. Sure, £136 million is still a shed load of cash to pay out every week so the only way to assess its value is firstly, to look at the benefit, and to secondly, look at the cost of the alternative. The first is easy to quantify, the second less so, but it can be implied by using a bit of common sense.

EU membership benefits us to the tune of around £210 billion a year, and around 4 million jobs supplying both goods and services (directly and indirectly) are dependent on servicing this arrangement; the benefits therefore easily outweigh the costs. (1)

'Let’s be clear; The NHS will NEVER see that money, and if you believe it would you’re a fool. Remember the Government could choose to spend more money on the NHS now but uses any and every excuse not to.'

Scaremongering

Whilst BREXIT campaigners have been taken to task over the sheer volume of lies they are circulating, the government have quite rightly also been accused of misinformation regarding their scaremongering tactics; in particular how an exit might affect, jobs, the economy, pensioners, Expats, interest rates, inflation etc. etc. It’s unfortunate, and it certainly hasn’t helped the debate, but there is a difference; a bare faced lie is one thing because it’s easily disproved, extrapolating data from models constructed on the basis of something that hasn’t happened yet, is another matter. When doing this one can use the statistics to prove anything one likes because it can’t be disproved. It can only be challenged using other models that are more positive from the opposition; which are, in themselves, in any event generated by assumptions concerning an unknown effect – so you see the problem. (3)

Having said all that I don’t think anyone seriously believes it will cost 3 million jobs. Incidentally, if you look at Cameron’s speech on this and the transcript you’ll see that this fact was falsely reported by some newspapers. I also don't that it’ll cost the economy as much as the upper end of what some of the government’s models are predicting - but the pint is we simply don't know.

Summary

This is an easy one because it’s been a simple exercise to prove that the costs of EU membership are significantly outweighed by the benefits. This has been the case from the start and although trade with Europe has slowed down in recent years leading to a European trade deficit (the difference between imports and exports), it’s not the only way to judge our economic relationship with Europe. In this respect it’s manifestly obvious that the EU is our most important trade partner and will be for many years to come. Although the deficit is substantial it’s just one of a number of parameters that need to be assessed when looking at value; most notably FDI, access to the Single Market, established costs and regulatory infrastructure, job security and the opportunities that still exist within the EU that we could potentially exploit by maintaining our membership. (4) (5)

The EU is of course far from perfect and does waste significant amounts of money whilst also imposing restrictions in some areas. There are, however, definite signs of improvement. In any event all of the accusations levied at the EU regarding these issues, as we’ve seen from other sections of this website, can be levelled at our own government too.

'Ours is a government that has cost the tax payer untold billions through a variety of appalling, ill-informed decisions; one IT system scandal after another representing a cost of 10’s of billions, the nationalisation of a number of our core industries (costs estimated in the 100’s of billions), our exit from the European monetary system and the total failure to predict the 2008 banking crisis that drove the UK into one of the deepest recessions of recent years in 2008.'

Ours is a government that has cost the tax payer untold billions through a variety of appalling, ill-informed decisions; one IT system scandal after another representing a cost of 10’s of billions, the nationalisation of a number of our core industries (costs estimated in the 100’s of billions), our exit from the European monetary system and the total failure to predict the 2008 banking crisis that drove the UK into one of the deepest recessions of recent years in 2008.

The last 50 years has been a turbulent ride and, if anything, our relationship with Europe has proven to be one that has consistently sustained us and helped us grow, rather than one that has held us back. Giving full control back to Westminster now, based on their track record, would be like handing the nation’s purse strings to Mr. Magoo.

Sources:

1 - https://www.eureferendum.gov.uk/q-and-a/trade/

2 - https://next.ft.com/content/745d0ea2-222d-11e6-9d4d-c11776a5124d

3 - https://fullfact.org/economy/ten-things-know-about-economic-models/

4 - https://www.theguardian.com/business/2016/jun/09/uk-trade-deficit-falls-after-record-rise-in-exports

5 - http://www.niesr.ac.uk/blog/after-brexit-how-important-would-uk-trade-be-eu#.V17Jk6LNKd4

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COSTS