Lies, damned lies and statistics

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It's said you can prove anything with statistics. Indeed, you can even prove that the European Union represents good value for money.

Don't believe me? Well yesterday I went to see Richard Ashworth - former chairman of United Milk and more recently a Conservative MEP with involvement in both the agriculture and budget committees - who rattled off some numbers to prove the point.

Statistics.gifHe was trying to counter claims made by the UK Independence Party that Britain's membership of the EU is costing us £40m a day.

That figure was taken by dividing the UK's gross contribution to the EU budget - about £14bn a year - by 365 to give £40m a day. (OK, so the actual figure is closer to £38m, but £40m sounds better.)

The flaw, says Mr Ashworth, is that this ignores what the UK gets back from the EU.

First of all, there is the money from payments to farmers and the rural economy. That comes to about £3bn. Then there is the structural fund, which pays another £4bn for poorer parts of the UK. And then there is the UK's annual rebate - worth another £3bn.

Taken together, that gives a net cost of EU membership of just £4bn - still a lot of money, but far removed from UKIP's gross figure...

But Mr Ashworth takes the analysis further. He argues that about 50% of the UK's exports are with the EU, and that amounts to £120bn a year. The average tariff for countries outside the EU is 5.24%. Applied to the UK's exports, that would amount to £6.3bn if the UK were not part of the EU. So the trade benefit of not paying that tariff exceeds the net cost of being in the EU.

He also pours cold water on UKIP's claim that the UK would not have to pay any tariffs if it were part of a free trade area with the EU as Norway is. There is no such thing as a free lunch, he explains, and even Norway has to pay £400m in annual contribution.

With 4 million citizens, that works out at £100 each. Given that we have a population of 63 million, that would rack up to an equivalent contribution of £6.3bn if applied to the UK. Again, we're financially better off being in the EU, plus we have a say in how the rules are made.

Of course this is all pretty simplistic. Clearly the actual tariff cost to a UK outside the EU would depend on the mix of products exported and the changing list of destinations. And trying to estimate the contribution the UK would make to the EU under a Norway-style free trade area is highly speculative.

And, to be fair to UKIP, while much of its publicity refers to the gross cost of EU membership, some of its analysis goes further, accounting for the money we get back. But it then adds on things like the higher price of food due to the CAP and the cost of EU regulation.

Which all goes to prove two well-known truths. First, you can prove just about anything with statistics. And second, politics is a dirty game of claim and counter-claim.

* For another view on UKIP's maths see this blog by nosemonkey And for an alternative UKIP view, see Gerard Batten's calculation

 


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About this Entry

This page contains a single entry by Philip Clarke published on November 17, 2009 4:20 PM.

High Level Dairy Group talks the talk was the previous entry in this blog.

Farm incomes up 25% - or are they? is the next entry in this blog.

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