Britain will still be paying EU divorce bill in 2064
Government economic advisers admit Brexit payments will last for 45 years
BRITAIN could still be paying off its EU divorce bill to Brussels in 2064 – a full 45 years after Brexit, it was revealed yesterday.
According to the UK Government’s economic forecaster, the Office of Budget Responsibility, the timescale is down to continuing pension contribution payments to EU staff.
It comes as Philip Hammond, in his first Spring Statement, gave an upbeat assessment of the UK’S economic prospects and pointed to a public spending splurge in the November Budget if the economic figures continue to recover.
The Chancellor told MPS: “If, in the autumn, the public finances continue to reflect the improvements that today’s report hints at, then I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted.”
The Treasury pointed out that Mr Hammond had £15.4 billion of headroom, much of which could be spent on NHS spending with a potential knock-on Barnett Formula windfall for the Scottish Government.
But John Mcdonnell for Labour criticised the Chancellor for not ending austerity now and accused him of “astounding complacency”, adding: “The Chancellor has proclaimed there is light at the end of the tunnel; this shows just how cut off from the real world he is.”
The SNP’S Ian Blackford criticised Mr Hammond’s failure to prepare for the cost of Brexit and for remaining wedded to austerity, suggesting Scotland was “shackled to a sinking ship”.
While borrowing is down, inflation is set to fall and employment is rising, the growth figures are muted with the Office of Budget Responsibility placing them at just 1.5 per cent in the years ahead.
A prediction from the OECD watchdog was even gloomier, suggesting the rise in GDP would be 1.3% this year and 1.1% in 2019, placing the UK at the bottom of the G20 growth table.
In its number-crunching analysis that accompanied the Chancellor’s set-piece Commons statement, the OBR calculated the costs of Britain’s exit from the EU.
The UK Government had estimated in the December Agreement that the divorce bill would be in the region of £35bn to £39bn and the independent forecaster took a central estimate of £37bn, with the bulk, some 75% or £28bn, falling in the years after Brexit in 2019 up to the financial year of the next election in 2022/23.
The OBR also calculated, in terms of some £68bn in future EU pension payments, that Britain’s share would be £8.4bn up to 2064. But this would be offset by assets such as reimbursed contributions to the European Investment Bank, meaning the final liability to the UK taxpayer would be nearer £2.4bn over the 45-year timescale.
The independent forecaster ended its report saying: “The impact of Brexit on the public finances is complex and uncertain and will depend on both the outcome of the current talks and how it affects our relationship with the rest of the world.
“Even with hindsight, it is likely to be difficult to quantify the impact of Brexit on both the economy and the public finances.”