Fact-Checking Remain: Do We Get £10 For Every £1 We Put Into The EU?
Here’s the biggest claim on the Remain campaign’s page:
“For every £1 we put into the EU, we get almost £10 back”.
Is it true?
TOO LONG, DIDN’T READ VERSION:
Ish. It’s an estimate based on a study, not solid fact, and it depends on totalling governmental contributions in and out, but it appears to basically be a reasonable claim backed up by research.
The claim is made here:
Some digging reveals that this figure is based on the Confederation of British Industry’s “review of the impact of EU membership on the UK economy”, which reviews a number of recent papers and concludes that the benefit of EU membership is approximately 4% — 5% of UK GDP.
The UK puts in £14.7 billion a year to the EU.
5% of the UK’s GDP is £90bn
So by those figures we’re looking at “for every £1 we put in, we get out about £6”.
However, if count “money we put in” as being the total we put in minus the total the EU directly puts into the UK government in various ways, we end up at £9bn approximately. (The EU also puts a couple of billion into non-governmental entities directly but that number’s rather slippery so we’ll ignore it).
At that point, we’re at exactly the statement from the Remain campaign — £1 in, £10 out.
So how plausible is the CBI’s study?
Well, it passes initial smell checks. Its primary source studies are recent (2014 and 2015). They haven’t taken the most optimistic estimates — the most optimistic of the papers they reviewed suggested a 31% of GDP benefit(!). Their reasoning seems basically sound. They cover costs from EU regulation rather than just looking at upsides (estimated at around 2.5%). The number they come up with is about equivalent to the average of most studies looking at the cost of Brexit, too — those seem to hover between 3% and 8%.
Most of the criticism of the 5% figure seems to be based on an older study the CBI did, rather than the new one. The older one does indeed look pretty ropy. However, the CBI seem to have addressed most of the concerns with the new study — limited, out of date studies being the big one.
The Leave campaign’s criticism of this figure centers around the old study. They also claim that the CBI is “EU-funded”. The CBI gets less than 1% of its total annual income from the EU. (I checked their accounts.)
Channel 4’s Fact Check criticised them for skipping the IEA’s “Better Off Out?”, but it appears to have been published in 2001, so that seems reasonable. Their review of all papers also lacks any consideration of the quality of research — rating UKIP’s study and the US International Trade Commission’s as equally reliable, for example.
My only real concern with the CBI’s study is that the older, dodgier one showed a 4% — 5% effect, and so did the newer one. That slightly implies that they’re looking for reasons why their original number is right.
There’s also the concern that there are lots of estimates out there. That’s accurate, of course. The Remain campaign’s overselling it somewhat by presenting the numbers as solid fact. It’s a best-guess.
Nonetheless, after all that digging I think it’s a pretty solid one.
CBI Accounts: http://news.cbi.org.uk/news/cbi-annual-report-2014/
EU hands over €1m to big business CBI: https://www.morningstaronline.co.uk/a-0d67-EU-hands-over-1m-to-big-business-CBI
Vote Leave’s criticism of the £10 out for £1 in figure: http://www.voteleavetakecontrol.org/the_in_campaign_s_latest_leaflet_continues_to_do_britain_down
Channel 4 Fact Check on the older report: http://blogs.channel4.com/factcheck/factcheck-europe-bring-household-3000/16300