If we leave the EU what will we still have to pay them?

Neil MacDonald, economics producer, explains:

A key element of the savings UKIP sets out in its manifesto is the £9bn of net contributions we make to the European Union each year. But that assumes we’ll pay the European Union nothing if we leave and that seems unlikely. Both Norway and Switzerland are outside the EU but still pay into its budget. The question is: how much would the UK have to pay?

One way of estimating this is to look at what Norway pays in. You can see the detail here.

In 2013, Norway paid E296m into the various EU programmes it participated in. It also contributed to grants of around E347m designed to reduce economic disparites within Europe. That makes E643m a year. There’s another programme that costs about E150m a year but that doesn’t go directly through the EU budget so perhaps we should ignore that. There’s also more (though smaller) contributions in the area of justice, home affairs and regional co-operation.

Would the UK be expected to pay these sorts of contributions as well? Probably, because part of the justification for Norway making payments is that it benefits from access to the European Single Market. UKIP wants to do the same through a negotiated trade deal.

Its hard to know how the E650m a year Norway contributes would translate into UK terms but its worth noting that our economy is five times the size of Norway. So it doesn’t seem implausible that the UK might be facing an annual payment in the region of one or two billion pounds. The reality is that the final deal will depend on a long and probably difficult negotiation with the European Union.

UKIP can rightly point out that there should still be big savings – but assuming its the full £9bn a year seems very optimistic.