I was listening to a political programme yesterday when a member of UKIP (David Carswell I believe) made a short video saying every week we send £350m to the EU.
This is wrong, the UK doesn’t send £350m a week to the UK. Because as Sir Andrew Dilnot of UK statistics authority states:
“As we have made clear, the UK’s contribution to the EU is paid after the application of the rebate. We have also pointed out that there are payments received by the UK public and private sectors that are relevant here.” UK Stats
The Institute of Fiscal Studies also state:
“After taking account of the rebate, the UK’s contribution in 2014 was – again on the basis of Treasury figures – £14.4 billion,or 0.8% of GDP. This is equivalent to around £275 million a week. (IFS)
“If we take net contribution – i.e. net in the sense of being the total amount the UK paid into the EU budget less the amount of spending that was done by the EU in the UK – amounted to £5.7 billion. This is equivalent to 0.3% of national income, or just over £100 million per week.” (IFS)
Does an inflated figure influence anybody to vote leave?
The thing that interests me is – does an inflated figure convince anybody to Vote Leave anyway?
£350 million a week sounds a lot. But, then so does £275 million. £100m net contribution sounds a lot.
I don’t think there are many voters who think, well I don’t mind the UK paying £275 million a week to the EU, but £350 million is really too much.
The problem is these kinds of figures are hard to put into perspective. £50 a week sounds a lot if your struggling to pay rent.
Also, when you put the figures as a % of GDP, it gives a very different perspective. 0.3% of GDP sounds very insignificant compared to a weekly sum of £100m
- It reminds me of panics over the size of national debt. People can’t comprehend how we are £1,542.6 billion in ‘debt’. Yet, as a % of GDP current debt levels are half the level of the 1950s. (UK National debt)
Why use misleading statistics?
If the actual amount is not that critical, why use a statistic that is inaccurate and misleading?
Perhaps it is the psychology that the EU is the root of all our problems, and the source of a great financial burden. People look for statistics which confirm their ideological position and so Vote Leave look for highest possible cost of the EU.
But, it does seem a strategic mistake. There are arguments for leaving the EU (e.g. potential cost of immigration on housing market). But, artificially inflating the cost of the EU and placing the figure on your battle bus is not one of them. I would be more inclined to listen to Vote Leave if they used helpful statistics, such as the net cost is £100m a week, but there are other cases for leaving such as issues of sovereignty, limiting migration and lack of democracy in the EU.
What about George Osbourne’s claim Brexit could cost pensioners £32,000?
“Leaving the European Union could wipe up to £32,000 off the average pensioner’s wealth, George Osborne claims, as the remain campaign seeks to woo older voters deemed more likely to turn out on 23 June.” (Guardian link)
I wouldn’t put this in the same category as the £350 million a week. It’s not inaccurate to say Brexit could cause £Xm. Though it’s impossible to prove either way.
However, I would say the figure is highly speculative and not particularly informative. It is quite possible Brexit could damage the long-term economy, and in that case, pensions could be hit. But,a figure of £32,000 is highly speculative and dependent on so many variables it makes it of limited forecasting value.
However, just because it is not easy to predict future economic trends, doesn’t mean you shouldn’t try. Economic models can give insights into the impact of likely outcomes. I don’t accept the lazy suggestion ‘economists are always wrong’. If you leave a single market, there will be an impact on trade, economic growth that you can attempt to evaluate.
Related posts on EU
- The media and Brexit at Mainly Macro