Press coverage
The starting point for this letter is two articles in the Times and Telegraph (DT) from 20th January. The headlines speak volumes to me about these two papers’ coverage of EU issues. “Taxpayers landed with £1bn EU fines” says the Daily Telegraph. “Whitehall blunders will cost £1bn in EU fines” was the Times. The Daily Telegraph spiced up their article with a comment from a Conservative MP to the effect that this strengthened the case for a debate on Britain’s membership of the EU.

Single Farm Payments
Really? The origin of these reports lies in the seriously incompetent handling of the introduction of single farm payments under the last Labour government. Whether it was Mrs Beckett, the then Secretary of State, or the officials in DEFRA that bungled matters I know not but she carried ministerial responsibility and this was not the fault of the EU. I think the Times was closer to the mark.

EU Budget
Which led me to reflect on the EU budget and a comparison with our UK finances. A look at the Court of Auditors Annual Report on the implementation of the budget for 2009, published in the Official Journal on 9th November 2010, reveals appropriations of €124.5bn, or about £105bn at the then rate of exchange. The UK contribution, after the Thatcher rebate, was just over €10bn or £8.7bn at the same exchange rate. That is before EU spending in the UK.

Misleading claims
Europhobes and the get Britain out brigade frequently trot out the misleading statement that if we were not members of the EU our budget contribution would provide loads of schools and hospitals. Not at the level of cost established by the last Labour government for public private partnerships or private finance initiatives as they built lots of schools and hospitals, mostly in parts of the country where they had high levels of electoral support. The taxpayer will be paying for this for decades.

UK Budget
An even more telling comparison is with the UK budget in the current year. Overall expenditure is expected to be just short of £700bn (with only three quarters being covered by the tax revenues) and within that the second largest item is spending on the NHS at £97.7bn (per the Public Spending Review published autumn 2010). In other words our contribution to the EU budget is less than 10% of what we spend on health or, to put it another way, the total EU budget is about the same as what we spend on the NHS. Our net contribution, ie after spending on agriculture, regional programmes and research etc, in the UK, is about a third of the gross figure.

Everything is relative
These are large sums but in the overall scheme of things they are pretty small beer. The EU budget is capped at 1.24% of gross domestic product and is currently around 1% or just under. Public spending in the UK, that £697bn figure, is well above 40% of gdp and may be above 50%. Far too high a
share of the economy for a competitive open market and trading nation like us. One more point. In addition to being capped the EU budget may not borrow, in market contrast to member states like the UK.

EU Accounts
The other gibe which is loosely if not promiscuously put about by those hostile to the EU is that its accounts have not been signed off. This is simply not true. Don’t take my word for it but look at the annual report mentioned above (follow a link from my website or visit www.eca.europa.eu) Paragraphs I-X (1 to 10) of the Court’s Statement of Assurance provided to the European Parliament and the Council are the relevant text on pages 10-12 of the Official Journal volume 53 dated 9th November 2010. In particular read paragraph VII which states that the accounts present fairly, in all material respects, the financial position of the Union at 31st December 20009. A footnote points out that this is according to the International Standard on Auditing 700.

Certificate of Assurance
So why am I talking about this? Well it was those articles in the Daily Telegraph and Times what done it for me. Until the last two years there has been an outbreak of indignation in the British press when the Court of Auditors publishes its annual report in November and I get a trickle of letters complaining that they (the EU) can’t get their accounts signed off and this couldn’t happen in a business. Well, the accounts are signed off, they do have a certificate of assurance and excuse me for pointing out the obvious but neither the EU nor HMG are businesses and it seems silly to pretend that they might be or should even be considered in that light.

More needs to be done
This is not to say all is rosy in the garden. We have plenty to do by way of reforming process as well as restructuring the substance of the budget but things are much better than 10 or 20 years ago. I want to see less money going to agriculture (that should please those farmers who want less interference) and more going to research and innovation for the future health of our economy. I would also like the finger pointed in the right direction when British officials and politicians (DEFRA and Mrs Beckett for example) bungle so badly that both farmers and taxpayers suffer. Render unto Caesar and all that.