Reasons to stay in the EU: “It’s not the economy, stupid”.

EU budget figure (1)

net contributions to EU budget from member states in 2015

The people imploring us to leave the EU complain that we pay so much into the EU budget, but get so little back. It is true that last year the UK was the 3rd largest contributor to the EU budget, contributing 12.57% (after rebate), but still behind France and Germany, the largest contributor. It’s also true that we receive considerably less back from the EU than we pay in – last year the difference was £8.5Bn. This might sound like a lot, but the UK’s total Gross Domestic Product last year was £2000 Bn, so our net contribution to the EU was equivalent to 0.4% of GDP.

the UK making a net contribution to the EU budget is equivalent to London being a net contributor to the UK budget, while Cornwall is a net recipient. The UK is one of the wealthiest countries in the EU. Since the EU is not just a single market, but also has a social purpose, it seems right and proper that we contribute to make things better in poorer parts of Europe.

Who benefits directly from financial payments from the EU to the UK?

Of the £4.6Bn received last year, £3bn went straight to landowners, via the Common Agricultural Policy. Most of this was in the form of a single payment, paid to landowners whether they grow food or not. About 15% of it went to Rural Development and most of this  was spent on Agri-Environment Schemes.

It’s worth noting that there are some that argue that much of this subsidy is taken from food producers by others within the supply chain, and in particular the large retailers such as supermarkets. Others still argue that ultimately consumers benefit from cheaper food as a result of these subsidies. Both of these arguments are complex and I’m not going to go into the detail of them now.

£1.3Bn went to Regional Development Funds . These have now been wrapped up into one budget, which is spent via the Local Enterprise Partnerships (LEPs). The LEPs spend the money supporting local businesses in various different ways. For example 40% of the projected £3.6Bn LEP spend of EU money in the coming years will be spent “enhancing the competitiveness of small and medium enterprises (SMEs)”. SMEs have a turnover of up to £50M a year. As a comparison, 3% of the budget goes to projects “to preserve and protect the environment and promote resource efficiency”. £370M also went into the Social Fund, to support more employment, mostly by private businesses.

It’s also worth noting that £1.3Bn of EU funding went to UK private sector businesses to support research and development, but that this figure is not included in the calculations for the UK net contribution to the EU. If it was, our net contribution (for last year) would be reduced by 8.5%.

So it’s pretty clear from these figures that the direct beneficiaries of the £4.6Bn of EU funding last year are: landowners and other private businesses. A small amount of EU funding finds its way to the Public Sector and the Charity Sector, mainly to charities with large land ownerships such as the National Trust, who benefit from CAP subsidies.

It is true, for the average UK citizen, we pay into the EU budget via our taxes, and receive very little financial return. Most of the income from the EU goes to businesses of one sort or another. Is that a reason to leave the EU? I would suggest not.

I believe the EU can be a force for good if we can reclaim its social and environmental purpose. If it is downgraded to a single market then the arguments for staying in become much weaker.

But, to paraphrase a former US President “It’s not the economy, stupid”.




About Miles King

UK conservation professional, writing about nature, politics, life. All views are my own and not my employers. I don't write on behalf of anybody else.
This entry was posted in Common Agricultural Policy, EU referendum, Europe, European environment policy and tagged , . Bookmark the permalink.

14 Responses to Reasons to stay in the EU: “It’s not the economy, stupid”.

  1. Phil Brewin says:

    I agree, it is not the economy, despite stupid George’s efforts to spread fear of catastrophe.

    But neither are CAP & LEP compling reasons to stay.

  2. Badgerbod says:

    CAP is an appalling system to assist poor farmers. It does exactly the opposite
    As for LEP’s they are administered within the UK and it is not beyond the wit of man to maintain them after brexit by diverting existing EU payments to them. The best way to improve the lot of the poorer nations whether within EU or not, is trade. Handouts always lead to corruption and protectionism. French farmers being an example of a group very unwilling to share more of the cake with their equivalents in Poland, Romania etc. The dream of a social and environmental purpose for the EU is commendable but the greed, waste, corruption and inequality of the system will eventually bring it down. Follow the money and see who benefits. To quote from a song of my youth that still holds true: “When things get too big don’t trust them at all, if you want some control, you’ve got to keep it small”

  3. Michael says:

    I think it’s rather simple. Will leaving the EU create more problems than stayin in? I think it will. And I think the British public consistently underestimates the extent of the influence leaving the EU will have, given the extent of connections between Britain and the rest of the Union. Think of the millions of Britons who work in Europe or are happily retired in Spain – Brexit will surely affect them, negatively, in all probability.

  4. bobinchiclana says:

    I will vote to stay in, but not with enthusiasm. There is little doubt that many of those wanting to leave the EU and fair proportion of those who want to stay, wish to turn it into a deregulated free market union. So neither staying nor leaving offer much hope for maintaining and improving the worker, consumer and environmental protections, that the EU has championed in the past.

    These aspects of the EU’s work are treated as a burden (red-tape) rather than the benefit that they are to many individuals. We may not get direct financial returns but we get cleaner water, cleaner beaches, some habitat and wildlife protection, holiday and sick pay entitlement, lower mobile phone charges, quality standards for electrical goods, collective action on things such as AGW… etc, etc.

  5. Lindsay says:

    Sorry I am not quite clear what you are saying as economics is not my strong suit. You mention that a percentage goes on environmental schemes but what is the comparison? I have more or less decided to vote yes because of issues like environmental legislation, health and safety, workers’s rights etc but partly because this government is so rubbish at anything to do with the environment, and equality is a dirty word in their over privileged little world. However, I am not keen on landowners being net beneficiaries, especially if they use their land for grouse moors, shooting estates or golf courses.

    • Miles King says:

      thanks Lindsay. Only a small proportion of the EU funding to the UK via the Common Agricultural Policy is spent on schemes benefiting the environment – and even those schemes only deliver very limited environmental benefits.

      • Michael says:

        I think Lindsay’s question brings forward a very important point. The EU, it’s budgets, the effectiveness of the projects it sponsors and the rationale behind the decisions are very far from transparent. If the EU is to survive, it needs to bring drastic changes into the way it is run on all levels, regardless of the decision of the British people.

  6. Lindsay says:

    I suppose the question is -if we stay in can we influence the transparency and will our government be prepared to tackle that rather than concentrating on the narrow financial interests. Part of me thinks this us all fiddling whilst Rome burns, given a business as usual scenario commits us to a 4* temperature rise by the end of the century and we are preceding over the 5th mass extinction. Another part of me thinks that is probably only by co-operation throughout Europe that we will actually achieve a low carbon economy.

    • Miles King says:

      I sympathise with both your thoughts – but if we aren’t in Europe we can’t possibly hope to achieve the second one. And it’s notable that most of the Leave camp are climate denialists, along with a broader anti-environmental agenda.

      • Lindsay says:

        Yes they seem to be mostly little Engladers who believe we are to be over-run with immigrants and wind turbines!!

  7. Vulgaris@67 says:

    I’ll vote to stay not because the EU is perfect but as bobinchiclana has underpinning principles that are largely good. I would never trust this Govt, increasingly gripped by a right wing that quite frankly couldn’t give a shit about the environment and at its heart is a deregulated economy that which would ultimalelty see an even more divided and divisive society than we currently have.

    To be clear about one element, the Tories with Cameron at the helm had an opportunity a little while ago to cap agri-environment payments at a level whereby large landowners would not receive unjustified sums to do in most cases very little. He chose not to introduce this cap. So it is the UK govt that fails us all not the EU. If we stay in and work for a better Europe that in my view is a better goal. That will of course take a change in the UK govt. Who knows the Tories are doing a good job of ripping themselves apart over the EU so maybe a GE isn’t as far away as timetabled.

    • Miles King says:

      thanks – I agree there are better examples of Agri-Environment elsewhere in the EU. But that doesn’t get away from the fact that the majority AE schemes are merely renting nature from landowners on an increasingly temporary basis (now down to 5 years). This can hardly be described as value for money, or as a long term answer for nature.

  8. Pingback: Lead us not into temptation: of Trump, Brexit and the wrong kind of populism | Small Farm Future

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