Statistical Accuracy and EU Contributions

During the 2016 European Union membership referendum, the Vote Leave campaign’s central slogan was:

We send the EU £350 million a week, let’s fund the NHS instead.

To suggest “we send the EU £350 million a week” is a misleading claim, repeated throughout the referendum, and a misuse of official statistics.

The amount “we send the EU” should reflect the actual cash-flow to the EU. (Photo: Getty Images)

This article deals with the common counterarguments by those who still defend this erroneous claim.

The purpose of this article is accuracy in public debate, where official statistics should be properly represented.

In short

The figures used by politicians, campaign groups and activists should be accurate.

Despite the name, we do not transfer the amount called the ‘rebate’. It is a reduction in the UK’s gross contribution.

There are various arguments deployed to try and sustain this misleading claim, but all fail.

Four important figures

There are four figures of interest regarding the UK’s contribution to the EU:

  • The amount we would have sent in the absence of the abatement;
  • The amount the UK government actually sent to the EU institutions;
  • This amount reflects the direct effect of EU membership on UK government finances;
  • This amount represents the direct effect of EU membership on the UK economy.

These figures have different uses. It is the post-abatement gross contribution that represents the amount “we send the EU”. There are other effects of EU membership on the UK economy and society.

This table quantifies the different figures, from HM Treasury statistics. (Image: BBC)

The misleading claim is that the total pre-abatement figure could be used in other areas of public spending.

This would only hold true in the absurd situation the EU pays the UK an equivalent amount to the annual abatement, upon exiting.

We do not send the ‘rebate’

Before any money is sent to the EU, a ‘rebate’ is applied. It is formally called the “Fontainebleau abatement”.

Various institutions confirm this fact.

Treasury Select Committee: “The rebate does not leave the UK or cross the exchanges.”

Office for National Statistics: “Before the UK government transfers any money to the EU a rebate is applied.”

HM Treasury: “The UK’s gross payments are automatically to account for the rebate, meaning the UK only pays the post-rebate amount.”

House of Commons Library: “The EU do not pay the rebate in a separate transaction, it is deducted from the contributions the UK makes to the EU.”

Full Fact: “The rebate is applied straight away (its size calculated on the basis of last year’s contribution), so the UK never contributes this much.”

The abatement is applied before any money is transferred, meaning the post-abatement gross contribution is what we send. (Image: House of Commons Library)

Common Counterarguments

This section goes through some common counterarguments, observed on social media, by those maintain this erroneous claim.

No, this is a misuse of official statistics. We do not “send” the abatement.

The amount “we send the EU” should reflect the actual cash-flow from the UK government to the EU institutions.

It is plain that the abatement is not sent to the EU. (Image: ONS)

This is a false premise. Financial frameworks must be unanimously agreed:

The decision on the future long-term EU budget will then fall to the Council, acting by unanimity, with the consent of the European Parliament.

The UK has a veto over its own abatement.

The Vote Leave slogan was not about “control”: it included an empirical claim about how much “we send the EU”.

That claim is false.

Previously, the abatement was listed in the credit section of the ONS Pink Book.

This is an accounting procedure, and not reflective of the actual transfer of funds between the UK government and the EU institutions.

Andrew Tyrie: “It is not in fact debited from the consolidated funds.” (Video: YouTube/OldQueen)

In the ONS Pink Book 2018, the Fontainebleau abatement is listed a negative value in the debit section:

The gross contribution to the EU (“total debits”) has the series ID ‘GCSM’. (Photo: ONS)

The report was amended to remove confusion about the “total debits”.

There is no debate on factual matters: only correction.

Claiming the pre-abatement amount is what the UK ‘sends’ to the EU was found to be wrong by various non-partisan organisations, including the UK Statistics Authority, the House of Commons Library, Full Fact, BBC Reality Check, and Channel 4’s FactCheck.

These corrections occurred during the campaign, not as a response to the result.

Congratulations on the ability to read a dictionary.

What matters is what is being described: a discount by any other name feels just as sweet.

Despite the term, it is a deduction to the gross contribution applied before that money is exchanged.

Accuracy in public debate is worthwhile on its own terms.

That implies it is false today.

Statisticians should speak up and passionately challenge nonsense in public debates.

This blog looks at the use of statistics in Britain and beyond. It is written by RSS Statistical Ambassador and Chartered Statistician @anthonybmasters.