UK’s EU contribution soars to £11bn

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Published: Friday 31st October 2014 by The News Editor

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The UK’s net contribution to the European Union soared to £11.3 billion in 2013, an increase of £2.7 billion from the previous year, according to official statistics.

The Office for National Statistics (ONS) figures emerged as David Cameron is locked in battle with Brussels over a demand for a further £1.7 billion to be paid by December 1.

The increase in the contribution is mainly due to a £3 billion increase in the UK’s total gross national income (GNI) contribution, which is based on the country’s estimate of economic activity within a budget year relative to other EU member states.

The UK’s rebate increased from £3.1 billion in 2012 to £3.7 billion in 2013, the ONS said.

The UK’s net contribution to EU institutions has more than quadrupled since 2008, according to the ONS figures.

In 2008 the contribution was £2.7 billion, rising to £3.8 billion in 2009, £7.2 billion in 2010, £7.5 billion in 2011, £8.5 billion in 2012 and £11.3 billion in 2013.

Matthew Elliott, chief executive of Business for Britain, which is campaigning for fundamental reform of the EU, said: “Despite David Cameron securing a historic EU budget cut, the cost of the EU to UK taxpayers continues to spiral out of control.

“We cannot continue to write bigger and bigger cheques to remain a member of an unreformed and uncompetitive European Union. Business is struggling under mounds of EU red tape and the UK economy is threatened by yet another potential eurozone recession.

“We must secure a new deal from Brussels and that will only be possible through a referendum.”

In its report on the UK’s balance of payments, the ONS said: “In 2013, the UK made a net contribution to the EU of £11.3 billion. This was an increase of £2.7 billion from the net contribution of £8.5 billion paid in 2012.

“The increase was mainly due to the £3 billion increase in the UK’s total gross national income (GNI) contribution. The GNI contribution is calculated based on the UK’s estimate of economic activity within a budget year relative to other EU countries and can increase and decrease from one year to the next.

“The UK, like other countries, receives a rebate on its contributions to the EU, and similarly to its GNI contribution, it can increase and decrease from one year to the next.

“In 2013, the rebate paid to the UK increased £0.6 billion to £3.7 billion, from £3.1 billion in 2012.”

The figures do not include the extra £1.7 billion demanded by the EU, which followed a reassessment of national incomes carried out by statistics authorities in each of the 28 member states, and led to large demands for extra money from Britain, the Netherlands, Italy and Greece, while countries including France and Germany stand to gain to the tune of hundreds of millions of euros.

The Prime Minister has insisted he will not hand over “anything like” the £1.7 billion demanded by the European Commission, and Nick Clegg said the UK “can’t and won’t pay” by the deadline.

A Downing Street spokeswoman said: “We have been clear that there has been an increase in the UK’s net contribution to the EU budget, reflecting the way that the rebate was amended under the last government.

“The Prime Minister’s views on the EU budget are well known. He is absolutely clear that we should be doing all we can to bring down EU spending and get control of the overall EU budget.

“What we achieved with the seven-year framework – which was the first ever cut in the EU’s budget – is vital because that is was affects the UK’s contribution.”

A Treasury aide blamed Labour’s decision to give up part of the rebate for the increase in contributions.

The rebate is paid a year in arrears, and Treasury sources indicated that they expected the 2013 figure to be around £4.6 billion, an increase of around £900 million.

“This figure isn’t the full picture of the UK’s net contributions as it doesn’t include the 2013 rebate,” the Treasury aide said.

“But despite that the major reason our contribution is rising is that the previous government gave away more than £7 billion when it gave up nearly half the rebate.”

A spokesman for the Open Europe thinktank said: ” The big increase in the UK’s net contributions to the EU last year will only increase the political pressure on David Cameron not to give in to the Commission over its demand for an extra £1.7 billion for this year’s budget, which together with the UK’s recent strong economic growth relative to the rest of the EU risks cancelling out the cut to the EU budget that he managed to negotiate.

“More fundamentally, EU spending remains hugely wasteful and inefficient – reforming the budget by slashing farm subsidies and stopping the recycling of development funds around wealthier member states should be a priority for member states and the new Commission.”

Published: Friday 31st October 2014 by The News Editor

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