The EU currently spends about 1.05% of the wealth of its member countries through its budget.*

Member countries pay a contribution to that budget every year, mainly depending on the wealth and size of their population.

Some of the money which Britain contributes is spent on EU projects in Britain. But most of the richer countries, including Britain, pay more into the EU than they get back. The poorer countries receive funds to help their economies catch up. Some formerly poor countries, whose economies have prospered thanks to this support, have now switched from being net recipients of the EU budget to being net contributors.

In 2006, Britain's net contribution to the EC budget was £3.9bn.

Since 1984 Britain has benefited from an abatement in order to make our net payment fairer. The abatement compensates Britain for its low share of funding from the EC Budget, particularly from the Common Agricultural Policy - a spending area that was decided upon before Britain joined the EU.

When ten new and poorer countries joined the EU in 2004, it meant that a significant proportion of future EU budgets would be allocated to them. To meet our fair share of the costs of enlargement, Britain agreed in 2005 to gradually make limited changes to the abatement, such that by 2011 it will no longer apply to economic development expenditure in the new Member States.

In exchange for our contribution to the EU, we get many benefits. Access to the Single Market alone generates extra wealth for European citizens.

Each citizen also benefits in ways that are harder to quantify in cash, such as an improved environment, trade deals negotiated by the EU, and better security. 

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*This figure is based on the EU report of May 2007 and represents 1.05% of EU GNI for the period 2007-2013. See European Community Finance Statement - EC budget and measures to counter fraud and financial mismanagement