The total annual cost of EU membership to the UK could rise to 20% of GDP – if the EU continues with its current economic policies, a tendency likely to be reinforced by the proposed constitution. This is according to a new study of UK membership of the EU by Professor Patrick Minford. The book, ‘Should Britain Leave the EU?’, is published on 2 June 2005.
In the book Professor Minford explains that this potential cost is so large because of:
• Excessive regulation in labour and product markets; and
• The UK’s possible share of the enormous EU pension liabilities.
“The cost of the EU to Britain is equivalent to the UK economy remaining stagnant for eight years”, commented Professor Philip Booth of the Institute of Economic Affairs. “This book shows that the UK is severely damaged by the EU’s current and proposed future policies – as indeed is the general mass of the people within the rest of the EU.”
The effect of this on British consumers is illustrated by high prices for food and durable goods. Professor Minford says:
“The Common Agricultural Policy, for example, raises food prices by about a half. Less well-known is the fact that the EU’s informal agreements and anti-dumping procedures raise manufacturing prices by a similar amount. For example they raise the price of cars and furniture by around three quarters and the price of TV’s and audio equipment by around two thirds. These price rises result from the pervasive protectionism that lies at the core of EU policies.”
The book considers the ways in which the political advantages of collaboration within Europe can be maintained while removing this economic damage. It suggests that either:
• EU policies should radically change towards the adoption of new policies of free trade, competition and deregulation (to the great benefit of EU citizens generally); or
• The UK should renegotiate the UK’s terms of membership to avoid the damaging effects of existing EU policies; or
• The UK should simply leave the EU, continuing with co-operation in chosen fields.
The study concludes that the economic costs of the UK membership of the EU greatly outweigh the benefits. With the emerging debate about the EU constitution and the possible referendum this highly topical warning is relevant for UK consumers, employers and businesses
Professor Minford said: “The EU’s economic policies are deeply damaging to the UK; and the damage is set to get worse. British people should say ‘No’ to the EU Constitution; but matters cannot stop there. They also need to ensure that EU policies change radically, or else that Britain fundamentally changes its relationship to the EU.”
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For further comments or information please contact:
Ralph Jackson (Jackson Consultancy) 020 7323 3272 or 07968 984756
Prof. Patrick Minford 0292 087 5728 or 07378 005272
Prof. Philip Booth (IEA) 020 7799 8912
Dr Richard Wellings (IEA) 020 7799 8919
Copies of 'Should Britain Leave the EU?' may be purchased direct from the IEA.