Peter Lilley is a former Secretary of State for Trade & Industy and for Social Security, and is MP for Hitchin & Harpenden.
Rarely can a single number have caused so much embarrassment both to its users and its critics as the “£350 million per week” we do, or do not, send to Brussels. It was painted on the side of the Vote Leave battle bus during the campaign. It has since been seized upon by Remain campaigners as the “lie” that delegitimises the referendum result. And this claim is about to boomerang, since the EU’s negotiating position assumes that our true contribution has exceeded the published figure.
£350 million per week is the gross contribution that Britain pays the EU before netting off the Thatcher rebate and the money that the EU pays back to British farmers, regions, and so on. The Office of Budget Responsibility puts the net figure at £200 million per week, which it assumes will be used to fund increased public spending.
Apparently, Vote Leave organisers deliberately quoted the gross figure to provoke controversy, and in the hope that the Remainers would respond by saying: “the true net figure is only £200 million per week”. They calculated that the public would be incensed that anyone can be indifferent to paying over such large amounts – whether the true figure is £350 or £200 million.
Unfortunately for the Leave campaign, most Remainers did not fall for that. They denounced ad nauseam the £350 million as a “lie”, but wisely did not cite the true net figure at all, instead implying or asserting that it was negligible, if not zero.
As a result, although both campaigns attached a high importance to this issue, it played a far less important part in voters’ motivations than either side expected. Exit polls showed that half of all Leave voters said their main reason for voting to leave was to “that laws and policies should be made in the UK”; a third said it was to “control immigration”; and “getting back control of our money” was just one of the reasons given by the remaining sixth of Leave voters.
But ar from dying once the referendum was over, the £350 million per week “lie” has become the key justification used by those die-hard Remainers who seek to delegitimise and reverse the result. Virtually every speech by Tony Blair, Michael Heseltine, Peter Mandelson and John Major harps on it, as does every e-mail I receive from unreconciled Remainers across the country.
Belief that the referendum was won by a single big lie clearly provides solace to the losers. It excuses their defeat, while enabling them to feel morally and intellectually superior to the gullible and ignorant majority.
If the issue were just about scrupulous use of figures I would have sympathy for the Remainers. The Leave campaigners’ justification for using the gross figure – that when asked how much they earn people usually give the gross amount, not the net figure after tax – is valid but unconvincing. For my part, I invariably used the net figure of £200 million per week in debates, articles and leaflets throughout the campaign. I did not meet anyone who, on learning that the net figure was “only” £200 million not £350 million per week, decided not to vote Leave! But, in virtually every referendum debate, my Remain opponents asserted, in all sincerity – because that was what they had been lead to believe, -that the “true” net figure was negligible or zero. Moreover, if Remain truly believed in using net rather than gross figures, they should not have constantly referred to the gross sums that farmers, regions, and other programmes get from the EU without mentioning that we are net contributors to the EU – so this process simply returns some of the money we give the EU, all of which will be under our control after Brexit.
All that is in the past. However, the issue of how much we will give or no longer give the EU is about to raise its head again – this time to the embarrassment of die-hard Remainers.
Money is central to the negotiating position of the EU27. As Sir Ivan Rogers told the European Scrutiny Committee: “We have created a major issue inside the 27 with the hole that we will have created in the budget by exiting”. If losing our net contribution is significant across all other member states, it is impossible to argue that it is trivial to us. Given the EU27 will have to cut budget programs when they lose our net contribution, Britain can obviously increase spending – on the NHS or other priorities – once we cease making those contributions.
The EU 27 and Commission hopes to cover that loss for a few years by demanding that the UK pay an exit fee equivalent to several years’ net contribution. The Lords EU Committee “conclude that, as a matter of EU law, Article 50 TEU allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget and related financial instruments, unless a withdrawal agreement is concluded which resolves this issue.”
Moreover, the EU case – such as it is- presupposes that our contribution (gross or net) understates the real cost of our membership. This is because the EU makes spending commitments which exceed the amounts it budgets to spend! Those escalating commitments – not included in our annual contribution – will approach E250 billion by the time we leave. They are commitments of the EU itself, not member states, so they do not apply to us after we leave. But if we had remained members our 12 per cent share would have been some E30 billion. In effect, published figures for our annual contribution over the last decade have not included additional commitments every year of billions of pounds.
The EU claim that we are liable for large unbudgeted sums is a serious embarrassment to those arguing that the referendum result was won on the “lie” that membership cost us £350 million a week. At very least, it means that continued membership would cost us more than the published figures showed – substantially more than the net cost of £200 million per week, and maybe not much less than the gross figure of £350 million.
In short, the initial use of this £350 million figure by Leavers was devious. But to Leavers’ surprise and Remainers’ embarrassment, the EU’s negotiating position reveals it to be less of an exaggeration than either side thought. Remainers can no longer use it to delegitimise or reverse the Referendum result.