Greg Lance - Watkins (Greg_L-W)
EU & THE COST IS!!
EU & THE COST IS!!
BN60PinkBook2010
88 per cent of the UK Trade Deficit
over the last five years was with EU-26
In 2009 the UK traded in deficit with sixteen of its twenty-six EU partners.
UK exports contracted sharply compared with 2008; so did imports.
The UK Gross Contribution to EU Institutions continued its inexorable upward march, costing the British taxpayer £ 48 million per day in 2009.
- The UK current account balance (“trade deficit”) with the whole world, having reached alarming levels in 2006 & 2007, contracted significantly in 2008 & 2009.
Table 1
- The contraction in 2009 occurred in spite of a large increase in the UK deficit with EU-26. The UK deficit with the world outside the EU, strongly negative in 2008, almost disappeared in 2009 (a deficit of £ 1.1 bn). Table 2
|
Table 1: UK Current Account Deficit with World 2005 – 2009*
|
|||||
|
Year
|
2005
|
2006
|
2007
|
2008
|
2009
|
|
£ bn
|
32.8
|
44.9
|
36.5
|
23.8
|
15.5
|
- Cumulatively, over the period 2005 – 2009, the UK deficit with EU-26 accounted for 88 % of the deficit with the whole world. Cumulatively, on its trade with the world outside the EU, the UK has been almost in balance. Table 2
|
Table 2: UK Current Account Balance With EU-26 & Rest Of World*
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||||||
|
Year
|
2005
|
2006
|
2007
|
2008
|
2009
|
Cumul.
‘05 – ‘09
|
|
Balance UK/EU-26 £ bn
|
(40.6)
|
(35.5)
|
(38.5)
|
(5.5)
|
(14.4)
|
(134.5)
|
|
Balance UK/Rest of World £ bn
|
+7.8
|
(9.4)
|
+2.0
|
(18.3)
|
(1.1)
|
(19.0)
|
|
Balance UK/Whole World £ bn
|
(32.8)
|
(44.9)
|
(36.5)
|
(23.8)
|
(15.5)
|
(153.5)
|
|
UK Deficit with EU-26 as a proportion of UK Deficit with World
|
88%
|
|||||
- The value of UK exports to EU-26 shrank by almost a fifth in 2009 compared to 2008; the shrinkage in UK exports to the Rest of the World was less. Table 3
|
Table 3: Shrinkage of UK Exports from 2008 to 2009*
|
|||
|
£ bn
|
2008
|
2009
|
Difference
|
|
Exports to EU-26
|
342
|
277
|
(19%)
|
|
Exports to Rest of World
|
359
|
300
|
(16%)
|
|
Exports to World
|
701
|
577
|
(18%)
|
- On its trade with the whole world in 2009 the UK ran a large deficit on Goods,
(£ 82 bn), offset by surpluses on Services & Income. Table 4
|
Table 4: UK Current Account in 2009: £ bn*
|
|||||
|
Goods
|
Services
|
Income
|
Transfers
|
Total
|
|
|
Exports:-
|
|||||
|
To EU-26
|
124
|
64
|
77
|
12
|
277
|
|
To Rest of World
|
104
|
95
|
97
|
5
|
300
|
|
Exports to World
|
228
|
159
|
174
|
17
|
577
|
|
Exports to World as percentage
|
40
|
28
|
30
|
3
|
100
|
|
Imports:-
|
|||||
|
From EU-26
|
161
|
55
|
58
|
17
|
291
|
|
From Rest of World
|
148
|
54
|
85
|
14
|
302
|
|
Imports from World
|
309
|
109
|
143
|
31
|
593
|
|
Balances:-
|
|||||
|
With EU-26
|
(37)
|
9
|
20
|
(6)
|
(14)
|
|
With Rest of World
|
(45)
|
41
|
11
|
(9)
|
(2)
|
|
With World
|
(82)
|
50
|
31
|
(15)
|
(16)
|
- In 2009, UK exports of Goods (“visibles”) accounted for 39.4% of all UK exports worldwide. “Invisibles” (Services, Goods & Transfers) accounted for 60.6% of all UK exports worldwide. In other words, for the UK, the export value of “invisibles” is 54% (60.6/39.4) higher than the export value of “visibles”. Table 4
3
- In 2009, the UK increased its surplus (+ £11.5 bn) on its trade with the USA, though it was less than the surpluses of more than £ 17 bn recorded in 2005, 2006 & 2007. The cumulated trade surplus with the USA over the five–year period 2005-2009 is £ 75 bn, compared with a cumulative deficit with EU-26 over the same period of £ 135 bn.
Table 5
|
Table 5: Balances: Largest Surpluses & Deficits in 2008: £ bn*
|
||
|
Surpluses
|
Netherlands
|
12
|
|
USA
|
12
|
|
|
Luxembourg
|
8
|
|
|
Switzerland
|
8
|
|
|
Australia
|
6
|
|
|
Deficits
|
China + Hong Kong
|
(19)
|
|
Norway
|
(12)
|
|
|
Germany
|
(12)
|
|
|
EU Institutions
|
(7)
|
|
|
France
|
(6)
|
|
- In 2009, the UK Gross Contribution to EU Institutions hit a new record of £ 17.4 bn, equivalent to £ 48 million per day. UK Gross & Net Contributions are set to rise sharply from 2009 onwards as a result of the abandonment by Mr Blair, then Prime Minister, on 17th December 2005, of part of the Fontainebleau Abatement.
Table 6
|
Table 6: UK Contributions to EU Institutions: £ bn*
|
||||||
|
2005
|
2006
|
2007
|
2008
|
2009
|
Cum. 05 – 09
|
|
|
Gross Contribution
|
(15.1)
|
(15.4)
|
(15.8)
|
(16.4)
|
(17.4)
|
(80.1)
|
|
Receipts from “Brussels”
|
9.1
|
9.3
|
8.5
|
9.8
|
10.7
|
47.4
|
|
Net Contribution
|
(6.0)
|
(6.1)
|
(7.3)
|
(6.6)
|
(6.7)
|
(32.7)
|
Notes & Data Sources
* The Pink Book 2010, 31st July 2010, www.statistics.gov.uk > Economy > Balance of Payments > The
Pink Book 2010
a) Payments to & from supra- & international organisations, & remittances by expatriates, which are included in “Transfers”, are not strictly–speaking “Trade”, but a large proportion of them are trade-related. HM Government itself justifies UK net payments to the EU on the grounds (unsupported by any evidence) that “the UK needs to be in the EU for trade”.
b) The data above is not adjusted for the Rotterdam-Antwerp Effect (described on pages 200 & 201 of the Pink Book 2010) or the separate Netherlands Distortions (see Global Britain Briefing Note No 52, “UK plc’s Export Growth is Coming from Outside the EU”, 21st November 2008). The effect of these two distortions is to significantly overstate (in the Pink Book) the value of UK exports to EU-26.
BN60PinkBook2010 Draft: 26th August 2010
Global Britain Briefing Note
No 60 xx September 2010
Lord Stoddart of Swindon (Independent Labour)
Lord Pearson of Rannoch
Lord Willoughby de Broke (United Kingdom Independence Party)
Lord Harris of High Cross (1924- 2006) (Cross-Bencher)
Enquiries: Ian Milne, Director, Global Britain
BN60PinkBook2010 xx September 2010
Posted by: Greg Lance-Watkins
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