LETTER: Magnitude of the numbers

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There was a query in last week’s County Times about the circa £100 billion cost, that I cited in a previous letter, arising from our EU membership.

In fact the UK carries direct and indirect costs as indicated below.

The UK pays around £19.5bn pa (about £375m per week) in direct charges, of which the EU spends about £8.5bn pa on schemes in the UK. So the UK pays over £2, for every £1 that the EU spends on UK schemes.

Added to the net £11bn cost, UK businesses carry an indirect cost for complying with EU Regulations.

In 2005 the UK Treasury issued a Paper, estimating that cost at six per cent of GDP, which equates to £96bn pa (£1.85 billion per week) assuming a GDP of around £1,600 bn pa.

More recently economist Professor Tim Congdon estimated the compliance cost to be around 6.5 per cent of GDP, only a little more than the Treasury’s 2004 estimate.

While such estimates will not be accurate to the nearest £billion, the magnitude of the numbers speak for themselves. Once businesses are no longer so burdened, their output and contribution to Government coffers should increase, to the benefit of all.

None of the above includes the tens of £billions lost due to tax avoidance by big companies – because EU Law allows them to nominate the EU country where they are taxed.

As Labour leader Jeremy Corbyn said: “The EU knowingly maintains tax havens … around the continent … and allows European companies to outsource their profits to countries where tax rates are low.”

A Daily Telegraph article in 2013, puts the tax loss at around £120 billion pa. Weblinks are included below.

The above also omits around £2bn pa taken by the EU from UK VAT receipts and it does not include UK contributions to Eurozone bail-outs.

Clearly the compliance burden is unlikely to reduce, until regulations are once again proposed and enacted by our Parliament, but that will take time.

Treasury Estimate was obtained from this link


Link to Tim Congdon’s estimates:


Daily Telegraph article from 2013


Jeremy Corbyn’s comment:


Roger Arthur

Melrose Place, Storrington


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