Saturday, 28 May 2016

Treasury Select Committee criticises both EU referendum campaigns

A Treasury Select Committee have criticised both the Leave and Remain campaigns for sensationalising claims made about the EU.

Whilst it is refreshing to see MPs challenging their colleagues for misleading the public - and both sides have been guilty of this to varying degrees - it's disappointing that the committee heavily criticised the Leave camp whilst letting off Project Fear with a relatively gentle chastisement.

The Remain side have been running a campaign of fear and dishonesty with the help of the British government and taxpayer-funded media yet they got away with a fairly lacklustre slap on the wrist. The committee criticised the Leave campaign in particular for the claim that the UK gives the EU £350m a week, saying that it is misleading because it doesn't take into account the rebate which it describes as a "discount".

The rebate isn't a "discount", it's a cashback deal. The rebate is calculated in arrears and our contributions go up every year whilst our rebate goes down. This year we're paying the 2016 budget contribution minus the 2015 rebate which is calculated on last year's figures. Next year we will pay the 2017 budget contribution minus this year's rebate. Every year we're paying more than our contribution should be if the rebate was applied in the year it's calculated and with such eye-watering amounts of money involved even a few percent is tens, if not hundreds, of millions of pounds.

The rebate is also not guaranteed. It is a temporary agreement that lasts for 7 years when it has to be renegotiated and a new rebate agreement approved by every member state. Tony Blair gave away a big wedge of the rebate to show what a "good European" he was along with agreeing to a taper that sees the rebate continually decrease until it eventually disappears. That's assuming the UK manages to get the unanimous agreement of all member states to continue the rebate which is increasingly less likely as the EU runs out of money for bailouts.