There have been many estimates of the annual cost of Britain’s EU membership. It is of course a great deal more than merely our direct annual budget contributions, of around £20 billion gross. The biggest single element is the cost of unnecessary and onerous EU legislation, but there is more besides. In the past I have erred on the cautious side, and tended to quote a figure of “over £100 billion”.
So I am delighted to find that Professor Tim Congdon has produced a very thorough, substantial and well-researched study, which shows that my figure was cautious indeed. It makes very alarming reading. He puts the total figure at £150 billion, or in round terms 10% of GDP. At a time when we’re talking about “austerity”, and planning to cut vital services including the armed forces and the police, we are doing so with one arm tied behind our backs.
Think of the transformation if we cut loose from this massive burden. We might allocate (say) half of the proceeds to debt repayment, and the other half to tax reductions and vital services. Such a policy would transform our economy, and set us on the road to recovery and prosperity. And all it takes is the will to make it happen.
Tim Congdon is, of course, one of the UK’s most distinguished economists. We had the privilege of hearing him speak over the weekend at the UKIP Conference in Birmingham, where he shared a panel with Capital Economics’ Roger Bootle. In the 1990s, Tim was one of the “wise men” — the Treasury’s Independent Forecasters, and an adviser to the Conservative government. He is now UKIP’s Economics Spokesman.
The study finds that the direct fiscal costs of membership come in at around 1% of GDP; regulatory costs at 5%. Costs of resource misallocation, including the CAP impact, he puts at 3¼%. Miscellaneous smaller items, including the cost of jobs lost to EU immigrants; the cost of waste, fraud and corruption (including the CFP); and contingent liabilities including benefit tourism, take the total to a whopping 10%.
And what about the offsetting benefits of EU membership? The economic impact of free trade in the EU, for example? But of course many countries around the world, including Korea, Mexico, Norway and Switzerland enjoy free-trade access to the EU. India is just negotiating an EU free trade deal. As the EU’s largest trading partner, and a huge net customer of the EU, it is inconceivable that we in the UK should not also enjoy free trade terms when we leave the Brussels Empire. There are few if any benefits of EU membership that could not be achieved through a simple free-trade agreement, which would also offer us the benefits of independence, freedom and self-determination.
As we struggle to break free of a stubborn economic recession, we can ill afford the EU’s massive drain on our resources. To recover, we must first break free from the EU.