CLAIM: Northern Ireland is a net contributor to the EU.
CONCLUSION: This claim is false, as we estimate that Northern Ireland was a net recipient of £74 million in the 2014/15 financial year. Others have claimed that Northern Ireland is a recipient of £58 million, but this fails to take into account the requirement for match funding under the PEACE Programme and the exact value of farm subsidies.
In a report published on 20 May 2016, the Leave.EU campaign claimed that Northern Ireland is a net contributor to the EU, and Stormont would have saved £67 million in 2014/15 if the United Kingdom (UK) had not been in the European Union (EU). This figure was calculated by subtracting their estimates of the funding Northern Ireland received in the 2014/15 financial year from Northern Ireland’s approximate share of the UK’s overall contribution to the EU in 2014/15.
Northern Ireland and its contribution to the EU budget
It is true that the UK is currently a net contributor to the EU budget, even though the £9.9 billion figure cited in the Leave.EU report is an exaggeration. The House of Commons’s figure for the same year is £8.5 billion (p 9). (Full Fact released an analysis with a clear breakdown of why this is the most accurate figure.) When including EU grants dedicated to the private sector, which have ranged between £1-1.5 billion a year (p 10) over the last few years, the final contribution is closer to £7-7.5 billion. The European Commission has stated that with the rebate and all EU grants taken into account, the UK contributed £7.258 billion in 2013, a value in line with these findings.
However, the claim that Northern Ireland is a net contributor to the EU is false. Leave.EU made this calculation by estimating Northern Ireland’s share of the UK’s overall contribution of £18.8 billion in 2014/15 by proportion of the population, amounting to £500 million. They claimed that over the course of that year the European Union contributed £300 million through farm subsides, and another £133 million in structural funds. By subtracting this £433 million of receipts, their result is a deficit of £67 million pounds.
Their methodology has several issues. Most significantly, by failing to take into consideration the rebate that the UK received in 2015, the Leave campaign overestimated Northern Ireland’s contribution by approximately £125 million. This alone would make Northern Ireland a recipient of EU funding. Through its own investigation the BBC discovered this inconsistency, concluding that Northern Ireland was a recipient of £58 million.
Where does the funding go?
Leave.EU is not far from the truth when stating that Northern Ireland receives approximately £133 million a year through Structural Funds from the EU for the duration of this funding cycle (2014-2020). Structural Funds focus on a wide variety of programmes, ranging from regional economic development, to encouraging cross-border cooperation. Due to the fragile peace process in Northern Ireland, the EU has dedicated funds towards the PEACE Programme, a pot of money valued at £180.3 million (at 2014/15 financial year exchange rates) between 2014 and 2020. The Northern Ireland Executive and the Irish Government are responsible for matching 15% of this funding. In reality, the actual value of Structural Funds comes out to £128.9 million per year for this funding cycle when using last year’s average exchange rates. This would bring down the subvention total to £54 million.
However, a majority of the EU funding is received directly by farmers through the Common Agricultural Policy (CAP). The Detail has published an investigation of the figures from 2013/14, in which they analyzed the direct payments received by farmers during that year. They concluded that 38,000 payments from the EU totalled £349.4 million in subsidies. We applied their methodology to the data that the Department of Agriculture, Environment and Rural Affairs (DAERA) has released for 2015, and while subsidies have decreased, they still stood at £319.8 million. The Leave.EU campaign estimated agricultural subsidies from last year to be £300 million. Consequently, their claim is off by another £20 million, making Northern Ireland a recipient of £74 million in 2015.
Image: “Euros” by Images_of_Money licensed by CC BY 2.0