The Great Intelligence Squared Brexit debate, factchecked

24 May 2016

This week we sat on the panel of the Great Intelligence Squared Brexit debate. Former Deputy Prime Minister Nick Clegg argued for Remain and Labour MP Gisela Stuart argued for Leave. 

We checked their claims on the EU budget, immigration and how laws are made.

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EU membership fee

“Shall I say £350 million? Ok I’ll say £350 million a week... then you can come back and tell me how it’s a gross figure and how we get something back and all the rest of it. But roughly speaking, ever since Margaret Thatcher, for every £2 we pay in we get £1 back. And for the £1 we get back it’s under conditions.”—Gisela Stuart

The claim that the UK sends £350 million per week to the EU is wrong.

This figure does not include a rebate, or discount, on what the UK has to pay. In 2014 the UK would have paid £18.8 billion without the rebate but ended up paying £14.4 billion.

The estimate for 2015 is £12.9 billion. This is £248 million per week, or £35 million per day.

We also get money back, and it’s roughly right to express this by saying that since the 1980s, for every £2 we’ve put in, we’ve got £1 back in payments to the public sector. In recent years, we’ve been getting less back as payments have been rising, and it’s closer to 60 or 70p back.

The money we get back isn’t fully within the government’s control. If we left the EU we might choose to spend it all differently, or spend the same amount ourselves on the areas it’s spent on such as farmers, poorer regions and research grants.

EU laws

“The European Commission does not have the right to impose laws on us. It has the right to propose a law which then elected ministers and elected MEPs decide upon…. it can propose ideas but if we don’t like them and if other governments don’t like them or other elected politicians don’t like them you can amend or reject them.” —Nick Clegg

This is broadly right, although in many cases the UK alone can’t reject a law if enough other governments want it to pass.

The European Commission will commonly propose new EU laws, after having consulted other EU institutions and interested parties.

The draft EU law must then be approved by the Council, which is composed of government ministers, as well as by the European Parliament, which is made up of directly elected representatives from countries across the EU.

A draft law will commonly be amended by the Council and by the European Parliament. These institutions normally discuss the draft with each other and with the Commission.  

EU immigration

"When the government tells you 'we control our borders', no. What we do is we have permission to ask people to show you a piece of paper called a passport. That is not the same as control."—Gisela Stuart

We can’t directly control the number of EU nationals who come here due to the free movement of citizens between EU countries.

We can check the passports of EU citizens coming into the UK. But we can’t turn them away for lack of skills, or even for having a criminal record, we can only turn them away on exceptional grounds defined in EU law (public policy, public security and public health reasons).

About 1,800 EU nationals were refused entry to the UK on arrival and left the country in 2015.

“I think it’s incumbent on the Brexit campaign to acknowledge that actually people coming here have in many ways contributed to our country. The Portuguese nurses, the Danish doctors, the German engineers, they do actually pay their taxes”.—Nick Clegg

There’s no single right answer to the question of how much EU immigrants contribute to the economy in taxes, compared to how much they draw out in benefits and services. A lot depends on the assumptions researchers make when they try to tackle this.

That said, most studies suggest the impact on the economy from all immigrants is small either way, costing or contributing less than a penny in the pound of what the country produces.

There are always winners and losers underneath these broad, national figures, although the effects are still considered to be small. Research on wages has suggested that people who earn less are more likely to lose out.

Studies consistently find EU immigrants are more likely to make a positive financial contribution than citizens from outside the EU. So are recent immigrants from both in the EU and outside.

Recent arrivals tend to be younger than those here for a longer time, and this can mean they’re less likely to be receiving state assistance. And if people come here when they’re working-age and leave before they get old, they’re much more likely to be putting in more than they take out.

“Unless I’m wrong, those other single markets which are created do not have free movement of labour”—Gisela Stuart

It’s correct that other free trade areas don’t typically set up the free movement of people as in the EU. That’s partly why the EU’s trading arrangements are known as the ‘single market’, while other free trade areas are not - they go deeper than a typical free trade agreement.

The free movement of people does extend a little beyond the EU. It applies in the European Economic Area, so Norway and Iceland have it, as does Switzerland in a separate agreement.

But other high-profile free trade areas don’t. The North American Free Trade Agreement between the US, Canada and Mexico, for example, has a chapter on temporary visas for businesspeople, but that’s about it.

There is at least one example of something like free movement of people operating outside Europe. In South America, a residence agreement set up by the countries in the MERCUSOR trade group has “effectively establish[ed] an open border area in the region”, according to one expert.

While there are plenty of differences between this and the EU version, the MERCUSOR countries say they want to create “a free movement policy for persons in the region” in future.

EU budget audits

“The auditors haven’t been able to sign accounts for the past 14-odd years”—Audience member

“That’s simply not true. The accounts have been signed off for the last several... It’s simply not true to say they haven’t been signed off.”—Nick Clegg

The European Court of Auditors—which checks the EU’s accounts—actually gives two different opinions on them each year: whether they’re accurate and reliable, and whether there’s evidence that money is being received or paid in error.

The Court regularly ‘signs off’ the reliability of the accounts, and has given them a clean bill of health for the last eight years. But it has found significant errors in how the money is paid out consistently since it began giving opinions in 1995.

So the numbers accurately reflect what actually happened, it’s just that some of it shouldn’t have happened in the first place.

The Court said the EU’s accounts in 2014: “present a true and fair view of the EU’s financial results for the year … We were therefore able to give a clean opinion on the reliability of the accounts (‘signed off’)”

But it did find that 4.4% of EU spending was subject to error; just under £5 billion. It says this shouldn’t be confused with ‘fraud’ or ‘wasted money’ and it does recover some of the money. The Court explains:

“Our estimate of the level of error is not a measure of fraud, inefficiency or waste. It is an estimate of the money that should not have been paid out because it was not used in accordance with the applicable rules and regulations.”


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