Dr Hendy wrote i) that the EU ‘has provided 57 per cent of our trade’ and ii) that the UK’s net contribution to the EU ‘is £7bn’ (letters, May 5).
To begin with, EU output has fallen from 30 per cent of world GDP in 1980 to 17 per cent in 2015. During that time, UK growth continued well above the EU average, while EU unemployment is about twice the UK average.
In fact UK exports to the EU have dropped to around 43 per cent (not 57 per cent) of UK exports from around 55 per cent in 1999, while those beyond the EU have risen to 57 per cent.
They have been rising for some years while exports to the EU have declined.
Of course 43 per cent is important, but exports to the EU are falling. So as with any business, the direction of travel (ie the trend) tells us that we need to plan to trade increasingly with countries whose economies are on the rise - not in decline.
Now, dealing with the direct cost of EU membership, which is £19.6bn pa, or £11.1bn pa net, (OBR 2016) and which rose by around 100 per cent in the last decade, as our economy grew by only 14 per cent.
That is only part of the story and neglects the indirect cost of compliance with EU (compulsory) Regulations. Just 100 of them have been estimated to cost £33bn pa – while Professor Tim Congdon estimates a total compliance cost of £104bn pa.
Around 93 per cent of UK companies don’t even export to the EU but must comply with EU regulations, which impose an unnecessary burden on them, when they try to expand their exports beyond the EU.
Adding the £33bn to the net direct charge above, gives £44bn pa, which does not include the £10s billions pa lost due to the tax avoidance (allowed by EU Law) or the amount of UK VAT (circa 15bn pa) that the EU takes. On that basis, the total cost of the UK’s EU membership, exceeds £100bn pa.
That is higher than the UK Deficit and the direct cost exceeds all of the government’s recent austerity savings put together.
So there is an urgent need to stimulate innovation and productivity by removing the regulation millstone from around the necks of UK enterprises, particularly the five million Small to Medium Sized ones (SMEs), of which there are 7,000 in Horsham District alone.
Since legally binding reform is not available, we can only do that by leaving the EU. We can then ditch the above direct and indirect costs and have laws and trade agreements made in our Parliament, by MPs who are accountable to us.
Melrose Place, Storrington
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