The UK's EU membership fee

Published: 9th Nov 2017

The UK pays more into the EU budget than it gets back.

In 2016 the UK government paid £13.1 billion to the EU budget, and EU spending on the UK was forecast to be £4.5 billion. So the UK’s ‘net contribution’ was estimated at about £8.6 billion.

Each year the UK gets a discount on its contributions to the EU—the ‘rebate’—worth almost £4 billion last year. Without it the UK would have been liable for £17 billion in contributions.

The UK doesn’t pay or "send to Brussels" this higher figure of £17 billion, or anything equivalent per week or per day. The rebate is applied straight away (its size is calculated based on the previous year's contributions), so the UK never contributes this much.

The UK’s contributions to the budget vary from year to year. They’ve been larger recently than in previous decades.

A membership fee isn’t the same as the economic cost or benefit.

Being in the EU costs money but does it also create trade, jobs and investment that are worth more?

We can be pretty sure about how much cash we put in, but it’s far harder to be sure about how much, if anything, comes back in economic benefits.

£55 million a day doesn't include the rebate and is not based on recommended figures

The claim that the UK’s membership fee is £55 million a day comes from the £20 billion annual UK payment to EU institutions listed in the Office for National Statistics' (ONS) Pink Book. 

The ONS told us this isn’t the correct figure to use. It has another set of figures which actually represent official government payments, although this isn’t clear from the release.

The £20 billion figure includes payments to EU institutions by UK households, and so doesn’t represent what the government pays as a ‘membership fee’.

We previously said that “it's reasonable to describe £55 million as our ‘membership fee’, but it ignores the fact that we get money back as well.”

This was based on the understanding that the rebate is paid up front and then sent back, which we now know is wrong.

£350 million a week doesn’t include the rebate

It’s also been claimed that we send £350 million a week to the EU. That also misses out the rebate.

£350 million – or closer to £360 million – is what we would have paid to the EU budget in 2014, without the rebate.

But the UK actually paid around £275 million a week in 2014 and paid around £250 million a week in 2016.

The UK Statistics Authority has said the EU membership fee figure of £19 billion a year, or £350 million a week, is "not an amount of money that the UK pays to the EU each year".

Since then, the new chair of the Authority described a recent use of the figure by the Foreign Secretary, Boris Johnson, as “a clear misuse of official statistics”.

The UK gets money back

The government then gets some of that money back, mainly through payments to farmers and for poorer areas of the country such as Wales and Cornwall.

In 2016, the UK's ‘public sector receipts’ are estimated to be £4.5 billion.

So overall we paid in £8.6 billion more than we got back. 

The Treasury figures note payments the EU makes directly to the private sector, such as research grants. In 2014, these were worth an estimated £1 billion, so including them could reduce our net contribution further still.

The money we get back will be spent on things the government may or may not choose to fund if we left the EU. It’s not enough to look at the net contribution in isolation because what we get back isn’t fully under our control.

Different figures from different sources

The Treasury's European Union Finances release provides the best figures for the UK’s contributions to the EU budget, according to the ONS.

The Treasury and ONS both publish figures on the subject, but they're slightly different. The ONS also publishes other figures on contributions to EU institutions which don't include all our payments or receipts, which complicates matters.

The ONS figures ultimately come from the Treasury, and the numbers aren't the same because they categorise and account for the payments differently.

The European Commission is still another source of information which shows lower contributions.

Newer figures are available

You may also have seen reports that the amount the UK sends to the EU is actually half of the £350 million claimed during the referendum in 2016, or £156 million a week.

But that’s not comparing like with like.

The £156 million figure is calculated after the rebate has been applied and after the ‘public sector receipts’ for that year have been subtracted. The £350 million accounted for neither of these things.

Using these newer figures the amount we sent to the EU, after the rebate but before any money spent in the UK is counted, is £234 million per week. These figures also look at the 2016/17 financial year, rather than the 2016 calendar year we have discussed throughout this article.

Update 9 August 2017

We updated this article to include information on the 2016/17 budget figures.

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