Why the Treasury report on the EU is wrong

Hi All.  It's been a while, and this is a politics post.  Feel free to ignore.

So, the treasury report can be found here.  The bits that this post is concerned about are page 192-193, B.26-B.33

It's an interesting read in it's own right, but there's something of a critical flaw in the numbers.  It's not a huge flaw, but it's misleading.  Misleading to the tune of £Billions. 

How, I hear you ask?  Well, it's about how much the UK contributes to the EU.   This is a complex number that changes every year, depending on a whole host of factors.  What the report does is look at the last 5 years published in the last published ONS report, which was 2015.  The average of those five years, 2010-2014 is ~£7 billion a year.  Sounds reasonable so far, right?

Well, no, actually.  Because the share of EU costs shifts.  The better off countries pay more - and one factor that this entire debate has failed to mention is that the UK has grown faster, year on year, than the EU.  And so because we've been doing markedly better our bills are going to increase.  Take a look at this report from the Parliamentary Library - Page 9.  There's a table of costs there, and it illustrates the problem.  EU Net contributions are going to be going up - by lots.  Billions, in fact.

Now, to be completely fair, the Parliamentary Report isn't directly comparable to the treasury, because this doesn't fully account for the money that the EU spends in the private sector in the UK.  But if we look at the 5 year average, 2010-2014 we get 8.86 billion, vs the 7.08 billion average the treasury gets.  If we look at the projected costs 2016-2020 in the Parliamentary report we get 9.5 billion.  That is, we're expecting an increased bill that's ~.7 billion bigger, every year.

Which the treasury doesn't think is important enough to mention. 

Even though this was reported in the telegraph last year...
http://www.telegraph.co.uk/news/worldnews/europe/eu/11727741/Budget-2015-Cost-of-EU-member-to-be-3-billion-higher-than-expected.html


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Oh, and another thought.  This entire treasury model is based around relative strengths.  It doesn't take into account the risk of the disintegration of the EU.  Of Greece, Italy and Spain's current  woes.  Of the impact of Syria, or Turkey joining.  The model assumes no potential downside..