EU & THE COST IS!!
EU & THE COST IS!!
- The UK current account balance (“trade deficit”) with the whole world, having reached alarming levels in 2006 & 2007, contracted significantly in 2008 & 2009.
- 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*
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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*
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£ 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,
Table 4: UK Current Account in 2009: £ bn*
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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
- 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: Balances: Largest Surpluses & Deficits in 2008: £ bn*
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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: UK Contributions to EU Institutions: £ bn*
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||||||
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)
|
Global Britain Briefing Note
No 60 xx September 2010
To Spread The Facts World Wide of
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