Truth behind TaxPayers’ Alliance’s EU attack ad

From tomorrow, the TaxPayers' Alliance will broadcast a completely fictitious advert on the costs of the European Union in cinema halls up and down the country.

The TaxPayers’ Alliance (TPA) today release an attack ad featuring foreign farmers, fishermen and bureaucrats with cash to burn, accordian music in the background, and a sinister voice bemoaning the “costs” of the EU. Their claim that the total cost is £2,000 per Brit is so misleading that Left Foot Forward has lodged a complaint with the Advertising Standards Agency and urges readers to do the same. The true net contribution is closer to £15 per person per year.

You can complain to the Advertising Standards Agency here. To save time you can use this model complaint.

The following is a point-by-point fact check:

Claim: The EU’s Common Agricultural Policy costs £10.3 BILLION a year

Wrong.

The £10.3 billion figure comes from the TPA’s own ‘Food for thought’ policy document which arbitrarily tacks on unquantifiable factors like “social welfare costs” (which the TPA put at £317 million), “regulatory burdens” (£264m) and “duplication of food safety agencies” (£5m) to the actual CAP budget (page 5). The TPA have also, failed to subtract the amount British farmers receive back from the CAP, which in 2006 was €4.3 billion (£3.9bn).

The TPA also fail to quantify the alternative to CAP, namely a separate agricultural policy for each country with France trying to out-subsidise everyone else in favour of its farmers; protectionist barriers emerging across Europe; and extra costs from divergent regulations and standards. This could raise the increased food prices above the £5.3bn attributed to the TPA.

Taking all this into account, the TPA have exaggerated by at least £4.5bn.

Claim: The EU’s Common Fisheries Policy costs Britain £2.8 BILLION each year

Wrong.

The figure of £2.8 billion comes from the TPA’s “The Price of Fish” document and, once again, factors in a whole series of tenuous external costs. They admit, for example, that their figures for “unemployment in the fleet”, “decline in communities”, “damage to recreational fishing” and “loss of comparative competitiveness” among others are only “estimates”, (pages 6-7). The Federal Union have previously dismissed these figures.

The entire fisheries budget for 2009 is only €900 million (£810 million) (p.3).

As with CAP, the TPA ignore the €137.8m (£124m) the UK will receive from the CFP via the European Fisheries Fund from 2007-2013 (page 27).

Indeed, the TPA ignore the fact that the decline of fishing is due to the decline of fish stocks, which would have happened anyway without the Common Fishing Policy (and arguably even more, if it weren’t for the CFP’s quotas).

Claim: Each EU MEP costs the taxpayer £1.8 MILLION (€2 MILLION) each year

Wrong.

The TPA get this figure from an Open Europe ‘study‘ from June this year, which appears to include £1.3 million worth of pension contributions for every MEP every year.

These are the actual facts:

An MEP’s pre-tax salary is €91,984 (£82,785) a year.

Pension contributions (at 3.5 per cent of the salary) are €3,219 (£2,897) a year.

They are entitled to a general expenditure allowance of €50,424 (£45,382) a year.

They can claim an annual travel allowance for official travel to a third-party state of €4,148 (£3,733).

They have a maximum staffing allowance – for staffing costs – of €210,480 (£189,432) a year.

Assuming that MEPs claim the full amount, this adds up to €360,000 (£324,000) a year, leaving a shortfall of £1.5 million, which no realistic amount of travel expenses and attendance allowances could account for.

Claim: Extra administration is costing EU companies £500 BILLION a year in lost earnings

Misleading.

It is unclear where this figure comes from but it only takes into account one side of the equation and ignores the significant benefit of EU regulations. Most EU legislation is about agreeing common rules for the common market. By having one set of rules and technical standards for 27 countries – instead of 27 different and divergent rules – EU legislation reduces costs for businesses and consumers alike.

For example:

  • a firm can register a trademark once, valid throughout the EU, without having to go through 27 different sets of national rules, form-filling and fee paying.
  • a lorry taking British exports to Italy used to need over 20 documents to present at frontiers – thanks to EU legislation this is now down to one.
  • the Payments Services Directive is expected to deliver more than €28 billion per year of savings to European consumers and businesses from the costs of trans-border transactions.
  • the proposed Directive on Energy Efficiency in Buildings was described by the Association for Conservation of Energy as “Invest €8bn. Get back €25bn

Of course, some regulation imposes costs on businesses – deliberately so where this will save public money or protect consumers or the environment.

There are also substantial benefits from trade linkages with the EU. A recent report by Oxford Economics shows that trade with the EU is in excess of £400 billion (52% of the UK’s total trade in goods and services).

Claim: VAT fraud in the EU costs us £80 BILLION a year

Misleading.

This is not a “cost of the EU” – it is fraud against EU Member States by criminals that the EU is helping to combat. Without the EU, VAT fraud would still exist.

Claim: Today the EU costs you TWO THOUSAND POUNDS a year

Wrong.

Even the house journal of the TPA, the Daily Express, puts the cost of membership at only £257 a family. In August, in an article featuring a quote from none other than TPA Campaign Director Mark Wallace (and taken apart by Left Foot Forward), the paper reported that Britain’s annual contribution to the European Union stood at £6.4bn.

But this takes no account of EU expenditure in the UK. The European Commission’s EU budget 2008 (Annex 5) shows that the biggest net contributor was Germany, which paid about €7.8 billion more into the 2008 EU budget than it received. By contrast, the UK made a net contribution of just €993 million. This works out at £15 per person – less than 1 per cent of the TPA claim.

The total EU budget for 2008 was €116.5 billion, which represents 0.94 per cent of the EU Gross National Income. Research suggest that “over ten years, the Single Market has boosted the EU’s GDP by €877 billion. This represents €5,700 of extra income per household.”

Conversions carried out at the rate €1 = 90p.

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