Supplementary written evidence submitted
by HM Treasury
1. The Treasury Select Committee (TSC) asked
for more detail on why "net expenditure transfers to EU institutions"
are £4.5 billion higher in 2010-11 than in 2008-09.
2. There are a number of factors that can
influence the size of the UK's contribution and as a result contributions
can be volatile from year-to-year. It is worth noting that UK
contributions in 2008-09 were relatively low. In 2007-08 net expenditure
transfers were £5.4 billion, some £2.3 billion higher
than in 2008-09. The full recent run of numbers is as follows:
|UK Net Expenditure Transfers to EU Institutions
3. Net expenditure transfers consist of Gross National
Income (GNI) based contributions less the UK abatement.
4. In 2008-09 there was a particularly large £1
billion one-off reduction in UK contributions, due to revisions
in VAT and GNI data for all EU Member State for earlier years
and due to the return of significant levels of budget under spend.
This is a key reason behind the fall from 2007-08 to 2008-09.
5. There are a number of factors underpinning the increase
in spending in 2010-11. They are:
programmed rise in the size of the EU Budget over
the course of the period 2007 to 2011; and
an increasing share of resources being allocated to
the New Member States, a reallocation of resources that the Government
6. The UK supports enlargement, which will create new
trading opportunities and new jobs. That is why the December 2005
agreement on the EU Budget set out that the UK's abatement will
be "disapplied" over time on non-agriculture spending
in the New Member States. This is the mechanism by which the UK
maintains its Budget abatement while supporting the enlargement
of the EU. The estimated extra costs of the December 2005 EU Budget
agreement were provided to the House of Commons in answer to a
question by the Member for West Dunbartonshire on 20 December
31 March 2010