UK will be paying Brexit ‘divorce bill’ until 2064, says Treasury watchdog
Office for Budget Responsibility says it still lacks ‘meaningful basis to predict the precise outcome of the current negotiations with the EU’
New official data indicates that Britain will be paying its Brexit divorce bill for 45 years after leaving the EU – until 2064.
It is the first time the UK’s fiscal watchdog has set out how Britain would pay the bill Brussels is demanding London pay to meet its liabilities.
The Treasury argued on Tuesday that ongoing payments are in the UK’s interests because they spread the financial burden, but they will likely anger Brexiteers who want a clean break from the EU.
The OBR said Britain’s have to shell out a total of £16.4bn in 2019 and 2020, as it continued to pay into EU budgets “as if it had remained in the EU”.
After that, outstanding commitments would total £18.2bn between 2021 and 2028 – including around £7.5bn in 2021 alone – casting fresh doubt claims of a “Brexit dividend” to be spent on the NHS, for example.
Although annual payments would fall sharply from around £3bn in 2023, they would continue for a further four decades, with around £500m still owed in the final year.
In its verdict on the Spring Statement, the OBR said it still lacked a “meaningful basis to predict the precise outcome of the current negotiations with the EU”.
And, although the UK will stop making full contributions to the EU after Brexit, the government has committed to spend money on items that used to get funding through EU membership.
Farm support – around £3bn a year.
Shared prosperity fund (a proposed fund to replace EU structural funds, which fund projects in deprived areas) – around £1bn a year
Overseas development assistance (putting money that went into the EU’s aid budget into the UK’s aid budget instead) – around £1bn a year.
Science and education (contributions to allow the UK to continue participating in programmes like Erasmus, Creative Europe and Horizon 2020) – around 2bn a year.
Regulatory agencies (participating in various EU agencies) – around £40m a year.
Commenting, Chuka Umunna MP, leading supporter of Open Britain, said: “The Brextremists promised us an additional £350 million for the NHS paid for out of our contributions to the EU yet we now know that if Brexit goes ahead we’ll be paying money to the EU until 2064 and there won’t be an extra penny for our heath service.
“As the economic cost of Brexit continues to bite, with falling real wages, slow growth and high inflation, and a huge divorce bill in return for a worse relationship with the EU, we are all entitled to ask whether this is the right path for the country.”
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. 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.”
Best for Britain CEO Eloise Todd said: “The OBR report is another absolute Brexit shocker. We already knew that the cost of Brexit would fall on the shoulders of our children and grandchildren – now we’re told that even our great grandchildren will have a bill to pay.
“Far from the fantasy millions promised by Brexiteers, it’s becoming increasingly clear that Britain will be facing a ‘Brexit deficit’. No one who voted Leave was told we would still be paying the divorce bill in 2064.
“The Government should be honest with the British public: Brexit will leave our country poorer and ensure that the tyranny of austerity is here to stay.”
Today the chancellor also revealed how the £3bn to help departments prepare for leaving the bloc over the next two years would be allocated.
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Source : http://www.independent.co.uk/news/uk/politics/uk-brexit-divorce-bill-taxpayers-deadline-treasury-obr-office-budget-responsibility-a8253751.html
Source : https://www.mirror.co.uk/news/politics/uk-keeping-paying-brexit-until-12179896