Why does the UK get a rebate to EU contributions?

The UK as a member state of the EU must contribute to the funding of the EU (See How much does the UK contribute to the EU?.

However, the UK receives a rebate on its contributions. This is a sum of money deducted from the contribution value prior to payment. Therefore the rebate funds do not leave the UK and are never paid.

The UK argued for the rebate, which was introduced in 1984, because at the time it was the third poorest member of the Community but on course to become the biggest net contributor to the EU budget.

The main reason for this was that the UK had relatively few farms, so it got a small share of farm subsidies, which at the time made up 70% of budget expenditure.

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In 1984, the formula for determining how much a country paid into the Community budget was also unfavourable to the UK due to its emphasis on VAT-related income. The UK was in effect penalised for raising more revenue from VAT than most other member states and importing more goods from countries outside the Community.

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The rebate is equivalent to 66% of the UK’s net contribution in the previous year and is paid for by the other 26 member states as a roughly equal proportion of their economy.

Source: www.bbc.co.uk/news

How much does the UK contribute to the EU?

EU member states must contribute financially to the overall funding of the EU. The European Commission puts forwards a budget which is approved by the European Parliament before the start of each year. The vast majority will be spent on aid to farmers, rural development and aid to poorer regions.

It has been widely reported that the UK gives £350 million per week to the EU.

This figure has been scrutinised and found to be misleading by the UK Office for National Statistics. They found for the last officially available accounting period (2014):

• The UK’s official gross payments to the EU amounted to £19.1 billion
  • This is 2.4% out of total UK government spending of £798 billion
• The UK is eligible for a rebate of its EU membership cost of £4.4 billion
  • This rebate sum never leaves the country
  • £14.7 billion was the UK’s 2014 annual contribution towards the EU
• £4.8 billion of EU funding that year was sent back to the UK
  • These funds included £1.1 billion which came back through the European Regional Development Fund and £2.3 billion through the European Agricultural Guarantee Fund.

UK government’s net contribution to the EU – that is the difference between the money it paid to the EU and the money it received – was £9.9 billion in 2014.

This equates to £190 million per week – in other words, 42 pence per UK person, per day.

These figures exclude money from the EU that also comes back to the UK private sector (for example to fund research in UK universities). This was valued slightly lower still.

Source: ons.gov.uk (Visual Analysis of the funding)

Source: www.statisticsauthority.gov.uk

Does the UK have to leave the EU before negotiating trade agreements?

Under EU rules, EU member states cannot make separate trade deals with individual member states or non-EU countries on their own.

However, there is no legal precedent for a country to leave the EU and therefore need to renegotiate any trade agreement.

It is unclear whether invoking Article 50 would result in a change to the UK’s membership status, and therefore permit trade negotiations to begin with the EU and other non-EU countries (including those who already have agreements with the EU).

Source: www.bbc.co.uk/news

 

What trading agreements will the UK need to negotiate?

The UK currently benefits from a number of EU trade agreements that have been negotiated with over 50 countries. EU agreements with a further 67 countries are currently under negotiation, including the US (known as the TTIP), Japan and India.

On leaving the EU (post Article 50) the UK would need to negotiate a trade deal with the EU (acting on behalf of the remaining 27 member states), and any non-EU country, that it wishes to trade with.

The UK will also need to update the terms of its World Trade Organisation (WTO) membership where the commitments have previously applied to the EU as a whole. This would mean negotiating and agreeing updated UK schedules of commitments with all 161 other WTO members. Until the UK’s schedule of commitments was updated, there would be a lack of clarity surrounding the UK’s rights to access WTO members’ markets, and the UK’s ability to enforce those rights.

Source: www.gov.uk ) (HM Treasury analysis: the immediate economic impact of leaving the EU page 28)

Source: ec.europa.eu (European Commission list of Free Trade Agreements)

What benefits does the UK people get from EU membership?

Whilst the definition of benefit is a subjective issue, there are a number of items UK (and EU) consumers receive as part of their membership of the EU.

These items will continue in full whilst the UK remains a member of the EU.

Whilst not an exhaustive list, benefits will include:

• European Health Insurance Cards (EHICs) – (Directive 2011/24/EU) gives EU citizens free or discounted medical care
• The Mortgage Credit Directive – (Directive 2014/17/EU) this places regulation on the mortgage industry to protect consumers taking out credit agreements relating to residential property
• Flight delays – (Regulation (EC) No 261/2004)“If you’re delayed for more than three hours on an EU-regulated flight, where it’s the airline’s fault, EU regulation 261/2004 allows you to get fixed compensation of at least €250 per person”
• The Workers Time Directive – (Directive 2003/88/EC) provides a set of rights to EU workers to protect their health and safety
• Mobile phone roaming fees – (Directive 2015/2120/EC) The “EU is set to ban roaming fees within the EU from June 2017”

As no member state has left the EU before, it is unclear what, if any, benefits will be available to the UK post Article 50. These would be subject to Article 50 exit negotiations.

Source: http://www.moneysavingexpert.com

 

Will the UK have to comply with the European Court of Human Rights if we leave the EU?

Yes. The European Court of Human Rights (ECHR) is not an institution of the European Union.

The ECHR is responsible for a fundamental rights law called the European Convention of Human Rights which is enacted into UK law via the the 1998 Human Rights Act. The convention is an international treaty to protect human rights and fundamental freedoms in Europe.

Parties signing up to the convention include all 47 members of the Council of Europe

Source: www.bbc.co.uk/news

Source: en.wikipedia.org

What does ‘Brexit’ mean?

The word ‘Brexit’ is an abbreviation of the words ‘British’ and ‘exit’, used to describe the United Kingdom’s possible exit from the European Union.

Source: www.eureferendum.gov.uk

Can the Prime Minister invoke Article 50 without approval by Parliament

This is an area of debate and subject to great legal debate at present.

Article 50 says any EU member state can leave “in accordance with its own constitutional requirements”.

Without Parliament’s backing any prime minister invoking Article 50 without Parliamentary approval would be exercising what are known as prerogative powers. These are a collection of executive powers held by the Crown since medieval times and now reside with HM Government. These powers are often used in foreign affairs Parliament has largely left to the government. Case law establishes these executive powers cannot trump an act of Parliament.

It is therefore argued that under our constitutional settlement, the prime minister cannot issue a notification under Article 50 without being given authority to do so by an act of Parliament.

This is an issue which will require significant legal debate by specialists to determine the exact process for the Prime Minister to be able to withdraw from the EU.

Source: www.bbc.co.uk/news

Why are there so many Presidents in the EU?

Each of the seven institutions that govern the EU are headed by a President, however some have a more prominent profile in EU affairs than others.

The title of “President of the European Union” (or “President of Europe”) does not exist. Nevertheless, the term is often misused to mean any of:

• President of the European Council (since 1 December 2014, Donald Tusk)
• President of the European Commission (since 1 November 2014, Jean-Claude Juncker)
• President of the European Parliament (since 1 July 2014, Martin Schulz)
• Presidency of the Council of the European Union (since 1 July 2016, Slovakia)

The Presidency of the European Commission has the most powers as the head of the executive branch of the European Union. The President of the European Commission is (loosely) analogous to the role of a country’s Prime-Minister/Head of Government
(as opposed to the separate role of President of the European Council, who could be seen as the European Union’s Head of State)

Source: en.wikipedia.org (List of presidents of the institutions of the European Union)

Source: en.wikipedia.org (“President of the European Union”)

 

What is the EU Act 2011

This UK Parliamentary act clarifies and increases the UK Parliament’s control over aspects of EU decision making. Notably:

• Implements the “referendum lock” which means “any proposal that constitutes a transfer of competence or power from the UK to the EU will require not only Parliamentary approval, but also the approval of the British people in a referendum before the UK Government can agree to it.”

The UK Government’s Fact sheet explaining the Act details:

“This Act of Parliament:

• Ensures that if in the future there is a proposed treaty change or decision in the existing Treaties that moves a power or an area of policy from the UK to the EU, the Government will require the British people’s consent in a referendum before it can be agreed: the ‘referendum lock’, to which only the British people hold the key.
• Increases our Parliament’s control over a range of EU decision-making. In future, all types of treaty change will require approval by Act of Parliament. Parliament will also need to approve, by Act, any agreement to use passerelle provisions in the EU Treaties which allow for changes in the scope of EU action or changes to ways in which measures are agreed in specific areas, but without formal Treaty change.
• Provides in statute that directly effective and directly applicable EU law only takes effect in the UK legal order by virtue of the will of Parliament – through the European Communities Act 1972 and through other Acts of Parliament, to counter any argument that EU law is some form of autonomous legal order independent of those Acts of Parliament.
• Provides Parliamentary approval for a treaty change which implements an increase in the overall number of MEPs provided for under the Lisbon Treaty. As part of this, the UK gains an extra MEP, taking us to 73 MEPs. The Act also makes provision to elect our extra MEP.”

Source: www.legislation.gov.uk (EU Act 2011)

Source: www.gov.uk