Was the UK the third poorest member of the EU despite being the second biggest net contributor in 1979?

Question

This video on YouTube of Margaret Thatcher at the EU Dublin Council on the 29th of November 1979 seems to suggest that the UK was the second biggest net contributor to the EU and also the third poorest member of the EU:

t = 1 min 11 s

I must say the other very big net contributors are Germany […] It's we and Germany who are big net contributors, and next year we would be the biggest of the lot, although one of the three poorest members.

Have I misunderstood something, or was the UK actually one of the three poorest members of the EU in 1979? Or was it not actually the (second) biggest net contributor?

Answer 1

Both parts of the claim are correct (if you define 'poor' as having a low GDP per capita).

As pointed out in other answers and in the comments, the UK had the third lowest GDP per capita out of the EU-9 in 1979 -- more than Italy and Ireland but less than Luxembourg, Denmark, the Netherlands, Belgium, France and West Germany. Here's a table

According to historic tables of EU revenues and expenditures, they were also the second highest net contributor to the budget in 1979. According to the table on page 94 of the linked report, the UK made a net contribution (total revenue minus total expenditure) of 1485.6 million ECU (European Currency Units; a unit of accounting) while West Germany paid a net of 1491.7 million ECU. Each of the other 7 member states made lower net contributions than the UK.

Even adjusting for population the UK would have been one of the highest net contributors at the time. Four of the nine member states in 1979 were net recipients. France made net contributions of just 79 million ECU (5% of the UK's) although its population closely matched that of the UK in 1979 (55 and 56 million, respectively).

The imbalance was considered so stark that the UK eventually managed to negotiate a significant and permanent rebate on its contributions to the EU budget.

The independent House of Commons Library (a research body for the UK parliament) has produced a number of reports on the topic in the context of Brexit. On the rebate, it says:

The rebate was introduced to address the issue of the UK making relatively larger net contributions than other Member States. When the rebate was introduced, in 1985, the UK received relatively little from the EU budget: it had a small agricultural sector, but most EU spending went on agriculture. At the same time the UK made relatively high contributions to the budget, despite being among the less well-off Member States at the time.

The European Parliament Research Service has an even more in-depth briefing on the imbalances in contributions and the origins of the UK's rebate:

The question of the UK's budgetary imbalances has been a source of debate and friction since the country joined the then-European Economic Community (EEC) in 1973. It was also one of the main topics under the spotlight during the June 1975 referendum, when UK voters supported continued EEC membership.

The historical context helps to understand the issue, which relates to a number of features of the UK economy and the EEC's finances in the 1970s and 1980s. On the one hand, the UK had a small agricultural sector, whereas most Community spending went on agriculture (some 70% in 1984- 1985).

On the other hand, the system of financing of the Community budget, which was then being implemented progressively, had as its main source of revenue an own resource related to Member States' VAT bases, alongside customs duties. In the UK, the VAT base in comparison with gross national product (GNP) was proportionally higher than in other Member States.

In addition, the UK was more open than other Member States to trade with non-EEC countries.

The combined effect of all these factors was a structurally negative budgetary balance for the UK, which at the time was among the less well-off Member States, with a per capita income lower than the EEC average.

Answer 2

Was the UK actually one of the three poorest members of the EU in 1979?

Context is important. The members of the EU in 1979 were the original six members that formed the EU in 1952 (Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands) plus three other countries that were acceded into the EU in 1973 (Denmark, Ireland, and the United Kingdom). While Greece, Portugal, and Spain had applied for membership before 1979, they were not acceded into the EU until 1981 (Greece) and 1986 (Portugal and Spain).

Those three nations (Greece, Portugal, and Spain), plus several other nations that have joined the EU since then, had a lower GDP per capita than did the United Kingdom at the time the referenced statement was made. Those poorer European countries that are now a part of the European Union were not yet a part of the European Union at the time that statement was made.

Based on 1978 numbers (the statement was made in 1979), the United Kingdom was the third poorest of those nine member nations of the European Union at time that statement was made, in terms of GDP per capita.