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EU: UK Net Contributing Cost

Volume 688: debated on Wednesday 24 January 2007

asked Her Majesty's Government:

Further to the Written Answer by Lord McKenzie of Luton on 29 November 2006 (WA 58-59), whether, over the five-year period 1997 to 2005 inclusive, the cumulative United Kingdom net contribution to European Union institutions, on a current account basis, was £44 billion; and whether, on the same basis, the cumulative United Kingdom deficit on trade in goods, services and income with the European Union member states was £72.5 billion. [HL1239]

The information requested falls within the responsibility of the National Statistician, who has been asked to reply.

Letter to Lord Vinson from the National Statistician, dated January 2007.

The National Statistician has been asked to reply to your recent Parliamentary Question asking about the United Kingdom (UK) net contribution to European Union institutions and the UK deficit on trade in goods, services and income with the European Union. I am replying in her absence. (HL 1239)

I have assumed that net contributions to the EU are equivalent to UK official transactions with European Union institutions. These, as included in the National Accounts, can be found in table 9.9 of the UK's Balance of Payments Pink Book (p. 149 of the 2006 edition), www.statistics.gov.uk/StatBase/Product.asp?vlnk=1140&Pos=1&ColRank=1&Rank=272

However, capital transfers are included in the total net contribution to the EU, outlined in the table detailed above, and I have assumed that these should be subtracted to calculate the net contribution on a current account basis. These capital transfers are UK receipts relating to the Agricultural Guarantee Fund, the European Regional Development Fund and other capital transfers from EU institutions. Data for 1997 to 2005 are available in table 9.9 of last year’s Pink Book.

Over the period 1997-2005 inclusive, the cumulative United Kingdom net contribution to European Union institutions, as I have defined above, is £32.6 billion.

Data for the United Kingdom's goods, services and income balances with European Union member states can be found in Pink Book tables 9.4, 9.5 and 9.6 respectively (pages 135, 139 and 143 in the 2006 Pink Book). Please note that although the 10 accession countries joined the EU in 2001, I have calculated the cumulative deficits below with the 25 countries that were European Union member states in 2006. Please also note that prior to 1999, data are not available for some of the accession countries; consequently I have only calculated the cumulative deficits from 1999 onwards.

Over the period 1999 to 2005 inclusive, the cumulative deficit on trade in goods, services and income with the EU 25 member states, excluding those with EU institutions and the European Central Bank, is £80.1 billion. For the current account as a whole—that is additionally including current transfers— the cumulative deficit is £80.7 billion.