15.2 The UKs deficit with the EU

Make-up of Total UK Deficit with EU24, 1997-2005.

In the nine years 1997-2005 inclusive, the UK, in aggregate, paid over £108.4bn to EU institutions & received back £64.4bn, resulting in an aggregate Net Contribution of £44.0bn. Table 1.
In addition, on its trade (imports & exports of goods, services & income) with the other 24 EU member states, the UK, over the 1997-2005 period, recorded an aggregated deficit of £72.5bn. Table 2, column d.
The combined UK deficit with EU24 member states & EU Institutions over the period 1997-2005 was, in aggregate, £116.5bn. Table 2, column e.
Note that the "pure" UK trade deficit with EU24 member states, having been relatively modest between 1997 & 2002 (there were even surpluses in 1998, 2000 & 2001), has ballooned since 2002, to £26.1bn in 2005 alone. Table 2, column d.

Table 1: UK Net Contribution To EU Institutions (£bn)

Year	a	b	c = a - b
	UK Gross Payments to EU Institutions	UK Receipts from EU Institutions	UK Net Contribution to EU Institutions
1997	9	5.8	3.2
1998	11.2	5.6	5.6
1999	11.8	6.8	5
2000	12.2	5.9	6.3
2001	11.3	8.3	3
2002	11.8	7.1	4.7
2003	13	8	5
2004	13.1	8	5.1
2005	15	8.9	6.1

∑ 1997-2005	108.4	64.4	44

Source: Table 9.2, lines CSFH, CSFI & CSFJ, pp 125-127, Source: Table 9.2, United Kingdom, The Pink Book 2006, Office for National Statistics, July 2006.

Table 2: Make-up of Total UK Deficit with EU24 (£bn)

Year	c*	D	e = c +d
	UK Net Contribution To EU Institutions	UK Deficit on Trade with EU24	Total UK Deficit with EU Member States & Institutions
1997	3.2	2.8	6
1998	5.6	-3.5	2.1
1999	5	4.2	9.2
2000	6.3	-	6.3
2001	3	-2.3	0.7
2002	4.7	5.5	10.2
2003	5	17	22
2004	5.1	22.7	27.8
2005	6.1	26.1	32.2
∑ 1997 - 2005	44	72.5	116.5

* from Table 1.

Source: Table 9.2, United Kingdom, The Pink Book 2006, Office for National Statistics, July 2006.

The source of the data set out above is the Balance of Payments section of the Office for National Statistics (the ONS), the British Government's national statistical service. The ONS, whose head reports to the Chancellor of the Exchequer, is an agency of HM Treasury.

The Balance of Payments data on flows of payments to and from "EU Institutions" is more comprehensive than (for example) the data which HM Treasury uses in its various publications. HM Treasury data usually refers to the payments HM Treasury makes to and receives from the "EU Budget" managed by the EU Commission. The Balance of Payments data compiled by the ONS additionally "captures" payments to & receipts from EU bodies other than the EU Commission by government departments other than HM Treasury, & by UK private-sector bodies. The UK Net Contribution is estimated to increase substantially over the period 2007-2013 as a result of the new arrangements agreed to by Mr Blair in December 2005, when the rebate was partially given up.

Reference

United Kingdom Balance of Payments: The Pink Book 2006: Free download: http://www.statistics.gov.uk/ > Browse by theme >Select Theme > Economy > Go > More detailed topics for Economy > Balance of Payments > United Kingdom Balance of Payments > Pink Book 2006.

IM, January 2007.