Wednesday, July 28

Brexit “divorce bill” higher than UK forecasts, Brussels estimates | Brexit

The UK’s Brexit “divorce bill” is 47.5 billion euros (40.8 billion pounds) according to Brussels estimates that are higher than government forecasts.

The first tranche, 6.8 billion euros, must be paid by the end of the year.

The final bill, buried in the consolidated annual accounts of the European Union for 2020, is significantly higher than a previous estimate from the UK tax watchdog.

In 2018, the Office for Budgetary Responsibility put the Brexit bill at 41.4 billion euros (37.1 billion pounds). During Brexit negotiations, British government officials said the final bill would be around £ 35-39 billion.

The bill covers the UK’s share of EU debts and liabilities over 47 years of membership, such as paying for infrastructure projects, pensions and sickness benefits for EU officials.

It was one of the three big issues that the government agreed with the EU in the Brexit withdrawal agreement signed by Boris Johnson in December 2019, after the prime minister won an overwhelming majority on a promise to “make Brexit.” The other main elements of the agreement were citizens’ rights and Northern Ireland protocol, which the UK is now trying to change.

The 2020 accounts have yet to be approved by the EU auditors, but the Brexit bill is believed to be unlikely to change.

Irish member of the Court of Auditors Tony Murphy told national broadcaster RTÉ News, which first reported the figure, that the € 47.5 billion figure could be considered final.

“While the 2020 EU consolidated accounts published by the Commission are still provisional, the court has completed its audit work on these accounts,” Murphy said in a statement to the broadcaster. “For all intents and purposes, the figures published by the Commission are final.”

While the EU accounts may not change, UK government sources said the exercise was an accounting estimate, rather than an official figure. Some liabilities may never materialize, for example if EU loan recipients pay back all the money rather than default.

The bulk of the Brexit bill, € 36 billion, goes to pay for EU infrastructure and social projects agreed to by previous UK governments. Much of the rest consists of EU responsibilities, including pensions and health insurance for retired EU officials, former EU commissioners and MEPs.

The government is also owed a share of EU assets, including € 1.8 billion in fines imposed on companies. As the EU competition regulator, the Commission regularly fines companies that break the rules and the UK is entitled to a share of the sums collected during its membership.

A UK government spokesman said: “This is only an accounting estimate and does not reflect the exact amount the UK is expected to pay to the EU this year.

“We will publish details on the payments to and from the EU made under the financial agreement in the EU financial statement later this year.”

The final bill is not expected to be paid for many years, although the UK has the option of making early refunds.

Boris Johnson once said that the EU “could go whistle” if they expected the UK to pay a divorce bill, but later accepted that the UK had to pay off its debts to negotiate a trade deal.

Leave a Reply

Your email address will not be published. Required fields are marked *