Bloomberg carried a story the other day about the cost of Brexit so far. They calculated it at £130 billion, rising to £200 billion by the year end. This was done by looking at the G7 average growth and then comparing where we expected to be, had the referendum not taken place, to where we are now. The impact of slowing growth on a near £2 trillion economy is significant and the gap will grow wider as time goes on.
Within a few days someone at Best for Britain had tweeted that this exceeded the total of all our contributions to the EU since we joined in 1973.
Stunning isn't it? Considering all the capital Vote Leave made out of the £350 million a week figure, you might have thought they would be up in arms about these latest numbers from Bloomberg. But not a peep. The fact that three and a half years of just talking about Brexit has cost us so much doesn't appear to trouble them at all.Incredible statistic: the economic cost of Brexit now exceeds what we’ve net paid-in to the EU over 47 years. https://t.co/3NCL6IutaS— Best For Britain (@BestForBritain) January 10, 2020
Despite the £350 million a week, they will probably now say it wasn't about money, it was sovereignty that mattered.
Anyway, I thought I would check their figures were at least approximately right and found this Commons Briefing Paper CBP 7886 for MPs from June last year. All the net payments from 1973-2018, after EU funding for UK projects and the rebate that Thatcher negotiated have been removed, are listed on page 9. Gross amounts are also shown.
If I add the unadjusted net total it comes to £156.3 billion up to 2018. However, this doesn't take account of inflation. If I adjust the figures for inflation (using a website see HERE) to bring them all to 2018 prices, the net total becomes £194.8 billion. So, although Best for Britain are not quite correct, by the end of the year their numbers will be about right even after inflation is accounted for.
In other words, even before we get to the end of the transition our economy will be smaller by roughly the amount of our entire net contributions paid to the EU since 1973 - 47 years in total.
I should say although it makes a good headline, I am not sure the two sets of figures are directly comparable since one is GDP and the other is the payments from The Treasury out of tax revenues. What it does demonstrate is what we get for our money. As far as the government is concerned, if I assume the tax take is about 35% of GDP, the tax revenues we have foregone by the end of the year will amount to approximately £70 billion (35% of £200 billion) compared to net payments to the EU of about £40 billion over the same period. But don't forget the gap will increase every year if growth lags behind the G7 average as expected.
I should say although it makes a good headline, I am not sure the two sets of figures are directly comparable since one is GDP and the other is the payments from The Treasury out of tax revenues. What it does demonstrate is what we get for our money. As far as the government is concerned, if I assume the tax take is about 35% of GDP, the tax revenues we have foregone by the end of the year will amount to approximately £70 billion (35% of £200 billion) compared to net payments to the EU of about £40 billion over the same period. But don't forget the gap will increase every year if growth lags behind the G7 average as expected.
And by the way, in researching this I found an article in The Telegraph from December 2015 claiming the total we had paid in to the EU since 1973 was half a trillion (£500 billion) with the figure said to come from research by - guess who - Vote Leave, using ONS figures. The Telegraph published the article quite uncritically.
Vote Leave were working on statistics up to 2014. The actual unadjusted total at the time was £118 billion. At first, I assumed they were taking inflation into account but doing this up to 2014 only brings the total to £178 billion anyway.
To get anywhere near half a trillion they must have used the gross figures before the rebate and before EU funds for the UK were taken into account. They quote the figure for 2014 as £19.1 billion (final figure as you can see from briefing paper 7886 was £18.778 billion).
Vote Leave were working on statistics up to 2014. The actual unadjusted total at the time was £118 billion. At first, I assumed they were taking inflation into account but doing this up to 2014 only brings the total to £178 billion anyway.
To get anywhere near half a trillion they must have used the gross figures before the rebate and before EU funds for the UK were taken into account. They quote the figure for 2014 as £19.1 billion (final figure as you can see from briefing paper 7886 was £18.778 billion).
And then halfway down the piece, the penny drops and I note this:
"Matthew Elliott, chief executive of the Vote Leave campaign, said: 'We hand the EU £350 million a week and counting – enough to buy a new hospital every week. David Cameron promised to cut the EU budget, yet we are handing more to Brussels ever year'."
This was back in December 2015, well before the campaign started, and as far as I know, it was the very first mention of the infamous £350 million a week figure. It came out of the mouth of Matthew Elliot, CEO of Vote Leave and now a paid advisor to Sajid Javid at The Treasury.
It's amazing how far you can go on a lie isn't it? But they are always found out in the end, as I am sure Mr Elliot will discover.
"Matthew Elliott, chief executive of the Vote Leave campaign, said: 'We hand the EU £350 million a week and counting – enough to buy a new hospital every week. David Cameron promised to cut the EU budget, yet we are handing more to Brussels ever year'."
This was back in December 2015, well before the campaign started, and as far as I know, it was the very first mention of the infamous £350 million a week figure. It came out of the mouth of Matthew Elliot, CEO of Vote Leave and now a paid advisor to Sajid Javid at The Treasury.
It's amazing how far you can go on a lie isn't it? But they are always found out in the end, as I am sure Mr Elliot will discover.
