Sex and Drugs and a £1.7 Billion EU bill.

October 24, 2014 9:31 AM

Robert Peston, BBC : "Well you may recall that the Office for National Statistics recently recalculated the size of our national income to take account of unreported or under-reported parts of the economy, such as research and development, illicit drugs and prostitution. So thanks in part to the inclusion in the official economy of our productive sex workers, our EU membership fee has been augmented." - The BBC's economic editor's take on the UK's new, increased (by £1.7 billion) EU subscription.

[filter comments by top rated and have a read, there are some interesting *cough*France*cough* comments]

posted by marienbad (17 comments total)

Ha! It's like the national version of waking up in Memphis.
posted by Ahab at 9:42 AM on October 24, 2014 [1 favorite]

It's hard out there for a pimp
When he's trying to get the money for EU...
posted by dances_with_sneetches at 9:52 AM on October 24, 2014

No. Never read the comments unless you're doing some sort of careful social research and are working in shifts with others, with counselling and exposure monitoring.
posted by BinaryApe at 9:52 AM on October 24, 2014 [6 favorites]

I'd be interested in a little context for this. Are other EU members including their black markets when calculating their national incomes, or just the UK? If it's just the UK, then this is absolutely outrageous. If Britain is just late to the party, well then, carry on.
posted by Edgewise at 10:55 AM on October 24, 2014

Basically the latter of those. This year the Office for National Statistics altered its method for calculating Gross National Income to be better in-line with the Eurostat standards for the EU. Since the size of a member state's contribution to the EU budget is calculated from this data (using the long-existing formula) it seems unlikely that the UK Gov wasn't aware it had been underpaying for several years and this bill was on the way - Mr Cameron's red-faced performance today notwithstanding.
posted by sobarel at 11:23 AM on October 24, 2014 [1 favorite]

I'd be interested in a little context for this.
EU 'costs Britain £118bn a year' so this 1.7 billion extra is about 1% of the annual bill for membership.
posted by Lanark at 11:33 AM on October 24, 2014

Woah, that's an absurd figure. In 2013 the UK's net contribution to the EU was £8.6bn. The total EU budget is 148bn Euros.
posted by sobarel at 11:46 AM on October 24, 2014 [1 favorite]

Did the member states know and agree to this?

Yes.

Member states are in agreement with how contributions are calculated using [gross national income]. And, critically for this specific case argued in favour of the statistical revisions to how economic performance is calculated - for obvious reasons - these, it is worth remembering, have allowed many countries to show better than previously thought economic growth and, in some cases, a smaller debt relative to GDP.

How the bills will be paid in December remains unknown, but despite this morning’s surprised faces and bullish remarks, it is highly unlikely that member states did not know, or did not anticipate, these figures. The calculations are even based on data provided by member state governments themselves, which Eurostat, the EU’s statistical institution, then verifies.

[...]

The communications, timing and politics of a billion euro bill to cover in a few weeks is of course something else, but these are the numbers.

Guardian: Britain's two billion euro bill explained
posted by goodnewsfortheinsane at 12:33 PM on October 24, 2014

From that Telegraph link:once the harmful impacts of its numerous policies and regulations have been taken into account, to be £118 billion a year

I suspect that the £118 billion (about 6% of GDP) "harmful impact" of complying with European regulation is considerably smaller than the value of consumer and business protections those policies and regulations buy us. And presumably quite a lot cheaper than writing all the standards ourselves.
posted by ambrosen at 1:38 PM on October 24, 2014

It's worth pointing out that if the UK left the EU it would still have to conform to EU regulations in order to continue to access the single market, but having lost any say in how those regulations develop. And also that, despite our largely anti-European press and the hysteria around UKIP, support for remaining in the EU is currently at a 23-year high.
posted by sobarel at 2:00 PM on October 24, 2014 [2 favorites]

Isn't it marvelous to see the party of balanced budgets, fiscal responsibility refusing to pay a bill they agreed to pay and agreed how it should be calculated. In fact it was the UK government that produced the figures for precisely this purpose.

This from the folk who brought you the Bedroom Tax.

A day later and the truth starts to emerge, The Chancellor never told him. Breathtaking incompetence, especially as other nations have been modelling away the effects for months.

Who needs UKIP with this bunch of monkeys in charge?
posted by quarsan at 10:23 PM on October 24, 2014

So, here's the paper produced in May this year (pdf)

Here is the beginning of the report, which suggests the revised figures were known in May, yet came as a complete shock to the government.
1 Introduction
Gross National Income (GNI) is an important statistic within the National Accounts. It is used in the calculation of a Member State’s contribution to the EU budget.
posted by quarsan at 10:43 PM on October 24, 2014

Peston says "... unreported ... research and development, illicit drugs and prostitution"

What happens in the UN and World Bank is related to drug dealers and corner prostitution from Times Square to Timbuktu ...

Rappoport started talking about GDP and world economics in a different way 15-17 years ago. It included the 'darkside', and likened financial measurement to Gaia philosophy—living organisms will affect the nature of their environment in order to make the environment more suitable, says Wikipedia. At least I think it was Jon Rappoport because I wrote it to a daybook* at the time that includes his name. But now, doh, nothing is to be found on the Internet.

There is a Rappoport website (thinks: maybe I'll ask him, his output seems tireless)

The daybook page* suggests what happens in investment banking and the Red Cross influences drug dealers and corner prostitution, shown below*. The notion makes sense and Peston will have known it for years; it was a likely sub editor who wrote the titillating headline.

* The Seven Rings of Gaia
1 The United Nations and associated agencies. The World Bank and the IMF.
2 Electronically conjoined equity trading and investment banking plus the brands that touch nearly all of us whether in Moscow or Cape Town.
3 Non governmental organisations such as Oxfam and the Red Cross.
4 World religions.
5 Science and technology.
6 The arts, sport and entertainment.
7 The darkside, international gangs of criminals, drug dealers and terrorists plus the law enforcers who chase them.

There is an intriguing 8th 'law' on the same page in the day book:
Families, properly informed, that may motivate humanist ethics to bring peace and new world order - but a global concurrence of values remains the Utopian dream.

Note to self: ask Jon Rappoport
posted by Schroder at 4:50 AM on October 25, 2014

I suspect that the £118 billion (about 6% of GDP) "harmful impact" of complying with European regulation is considerably smaller than the value of consumer and business protections those policies and regulations buy us.

Protecting consumers and workers from exploitation is precisely what they mean by "harmful impact".
posted by howfar at 8:26 AM on October 25, 2014

From the comments, is this true, does anyone know?

"The UK agreed to send the figures estimating our black market. France refused. Now we get hit with a "fine" for complying and France get "compensation" for not complying."
posted by marienbad at 10:41 AM on October 25, 2014

I've no idea whether it's true, but it would fit in with our longterm "worst of both worlds" attitude to the EU, in which we undermine our influence by doing everything begrudgingly, but doing it nonetheless. Meanwhile France plays the role of good European and complies to a much lesser extent.

What many Europhobes fail to understand is that France is, in many ways, both the problem with being in the EU and in being outside it. They didn't want us in from the beginning, and would punish us mercilessly for our error, were we to leave. We need more influence in the EU, not less.
posted by howfar at 11:40 AM on October 25, 2014

"The UK agreed to send the figures estimating our black market. France refused. Now we get hit with a "fine" for complying and France get "compensation" for not complying."

The sex and drugs aspect of this story makes for good copy, but it's really got very little to do with this recalculation. The black market (as it's defined for the purposes of these figures) is less than 1% of the economy.

As for France refusing to comply. I don't know where this comes from. All member states are legally obliged to provide the requested data to Eurostat - and they certainly haven't said anything about France refusing to do so. France is only being "compensated" because they have been overpaying into the EU for a number of years. In general, the idea that France and other countries comply less with European Directives seems to be a bit of a myth (there was a recent-ish study on this by the IHS in Vienna which found little difference over time in member state's compliance), and the European Commission has the power to take non-complying member states to court. They do this frequently - you can see a list of infringements on their site.

And this is not about targeting the UK: the adjustment to the Netherland's contribution, for instance, is 20% higher per capita than the UK's. Or about a funding increase for the EU: the contribution recalculations mean that the EU's budget will be smaller now.
posted by sobarel at 2:55 PM on October 25, 2014