More on the Cost of the EU

EU has Cost British Taxpayers £76bn since 1973

By Geoff Meade, PA Europe editor, Brussels

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Running the European Union costs its member states nearly 70 billion pounds a year between them - just under 1% of their total national wealth.

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About 40% goeson subsidising EU farming, about 35% in regional and social aid to poorer parts of the member states policy, and 5% in EU administration costs.

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The UK's share of the costs - it's "net contribution" after EU subsidies andgrants are calculated - averages about £3 billion a year.

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This is thanks to anannual rebate on London's bills to rectify a glaring gap between membership payments and cash benefits compared with other countries.

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Without the rebate the UK "net contribution" would be more than £ 5 billion ayear - 14 times that of France.

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Without taking account of any clawback benefits or rebates, the UK's total grosspayments to the EU budget since membership in 1973 would have been a staggering£238 billion.

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The rebate reduced that to £181 billion actually paid. That inturn was offset by farm subsidies and regional and social aid grants, leaving a net contribution since 1973 of £76 billion.

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Under proposed new spending plans the EU budget would rise to about £84 billionin 2006 and to £110 billion in 2013.

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The new system would involve phasing out the UK rebate, replacing it with a newsystem: all member states, including the UK, would get a limited rebate on theircontributions if those net contributions comprised more than 0.35% of nationalwealth. In other words, if the gap between what they paid to the EU budget andwhat they got back from it in grants and subsidies grew too wide. The effect of this new spending programme would be that the UK's netcontribution to the budget would virtually double.

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London would still qualifyfor a rebate - larger than anyone else's - because its payments would amount to0.51% of national wealth. But that would not prevent the UK becoming the biggest contributor to the EU budget, followed by Germany and Holland (each paying 0.48%of GDP), Sweden (0.45%), Austria (0.35%).

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Next comes France, which, with a netpayment equivalent to 0.33% of GDP would not qualify for a rebate under the newsystem.The UK government says the original justification for the rebate - therelatively-low level of farm subsidies to the UK sector from the EU budget - isas strong as ever, especially when French farmers receive more than £6 billion ayear from Brussels.

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The government flatly rejects the Commission's argument that the UK is now thesecond wealthiest EU nation per capita after Luxembourg and therefore can affordto give up the rebate.Officials in London say the Commission is taking statistics from one particularyear, and that International Monetary Fund figures show the UK below Ireland inthe wealth league table. Exact positioning depends on the "economic cycle" butthe UK fluctuates between sixth and tenth-wealthiest EU nation out of 25.