LONDON – The government is sending out one of the most interesting mass-mail letters of the year: The annual breakdown of how much tax you paid, and what the government spent it on.
Everyone in the UK who pays tax receives a personalised copy, so that you can see how much the government took from you in total and how the government spent that, down to the penny. It includes the amount of cash that went to the European Union.
The government spent about £755 billion ($917 billion) in total last year, according to the most recent numbers from the Office for Budget Responsibility.
Here is what that looks like in percentage terms. Only 1.1% of all government spending goes on the EU:
That 1.1% was the equivalent of about £8.5 billion in 2015, the most recent number available. While £8.5 billion is a lot of money on its own, it is a tiny portion of total spending.
Here is the same data presented a different way:
The EU budget is an even smaller part of the UK economy as a whole, which had a GDP of £1.9 trillion ($2.3 trillion) in 2015. And, ironically given the anti-immigrant sentiment that drove the Brexit vote, the UK spends more on overseas aid than it does on the EU.
Having said that, £8.5 billion is money the UK will get to keep after Britain leaves the EU in 2019. It adds up to about £163 million per week - less than half the amount claimed by the Leave campaign (£350 million) prior to the vote that would be available for Britain to spend on the NHS every week.
Of course, while the country saves the £8.5 billion it sends to the EU, it will incur extra costs in the form of barriers and tariffs that Europe is likely to impose on trade with the UK. Those barriers will probably be in the region of £22 billion annually, net of payments to the EU, according to estimates by Raoul Ruparel, an advisor to Secretary of State for Exiting the European Union David Davis.
The numbers are a bit fuzzy in terms of future costs (because they are estimates) but one way to think of it is this: The Brexit vote means Britain will be spending about £30 billion a year in indirect and direct costs in order to save £8.5 billion a year in direct costs.