Post-Brexit Budget

December 07, 2017 2:07 PM

Cutting EU Waste – The Taxpayer-Friendly Option for the EU’s Post-Brexit Budget 

Introduction 

In a separate Red Cell paper, William Norton reviews the impact of the UK leaving the EU on the latter’s finances. In short, the algebra means that the big donor countries pay up more to plug the gap. 

Surprisingly, it also turns out that there is a major difference in winners and losers if the UK and EU sort out a Free Trade Deal (FTA). 

Without an FTA, the EU states levy tariffs, hitting UK exports. These tariffs will go some way towards filling the gap left by the UK, as a net donor to the EU budget, leaving the EU. 

The biggest winners from not getting a UK trade deal turn out to be France and Italy, and particularly the Commission as it won’t face calls on its budgets being cut. The biggest losers are everybody exporting to the UK (which can levy its own tariffs, which will incidentally generate more revenue); the Germans in particular, given their exports share; Ireland (which will become a disproportionately massive net donor to the EU budget); EU taxpayers who will still have to pay into the EU budget via national contributions; and EU consumers whose prices will go up. 

So what is the alternative? In conjunction with the TaxPayers’ Alliance, the Red Cell explores in this brief paper evidence that efficiency savings can be explored within the current EU budget. In reality, this should already have happened, but powerful vested interests are in play. Brexit, however, provides the European taxpayer with a rare opportunity to see principles of prudent spending and sound management introduced into a long-discredited budget. 

 

Read full report here.

 

 

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