The Courier & Advertiser (Angus and Dundee)
Britain expected to pay £37.1 billion settlement
UK will be paying a huge financial bill to the EU until 2064, fiscal watchdog has predicted
Britain will shell out £37.1 billion to settle its Brexit divorce bill, but the UK’S fiscal watchdog predicts payments to the EU will continue until 2064.
The Office for Budget Responsibility (OBR) based its estimates on a joint report by UK and EU governments covering phase one of the Brexit negotiations, which it said provided “sufficient information” to calculate the cost of a financial settlement.
The settlement is made up of three parts, with the UK expected to shell out £16.4 billion as part of a multi-year framework that will effectively see it paying in to the EU annual budget until 2020.
A further £18.2 billion will be used to cover outstanding payments at the end of that framework agreement, which will be paid off between 2019 and 2028.
The remaining £2.5 billion reflects “pension liabilities less assets returned to the UK”, which the OBR said is only likely to be settled by 2064.
“Receipts and payments associated with these other elements of the settlement could extend for many years, although the precise modalities for meeting them have yet to be agreed,” the OBR’S forecast explained.
Together, it brings Britain’s total divorce bill to £37.1 billion – to be paid off over 45 years.
A Treasury spokesman said that under the OBR’S forecasts the payments at the end of the period would be “very, very small amounts” relative to current EU transfers.
The agreement reached by Theresa May and the EU in December meant that the UK would “not have to pay anything to the EU earlier than it would have” if it remained a member state.
But there was flexibility if both sides agreed to a settlement to end the payments earlier.
“The December agreement allows us, at some future point, to wrap it all up a bit sooner if we and the EU judge that is in our mutual interest,” said the spokesman..
“That is for another day, so it may well be that these payments do not go out that far, the agreement was explicit in allowing us to do that.
“But at the moment we have got an estimate of the period over which the £35 - £39 billion will be paid.”