Brexit ‘divorce bill’ higher than UK’s forecasts at £40bn

The UK’s Brexit “divorce bill” is €47.5bn (£40.8bn) according to estimates from Brussels that are higher than the government’s forecasts.

The first tranche, €6.8bn, is due for payment by the end of the year.

The final bill, buried in the European Union’s consolidated annual accounts for 2020, is significantly higher than an earlier estimate from the UK’s fiscal watchdog.

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

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

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

The 2020 accounts have yet to be signed off by the EU’s auditors, but the Brexit bill is thought unlikely to change.

Ireland’s member of the court of Auditors, Tony Murphy, told national broadcaster RTÉ News, which first reported the figure, that the €47.5bn figure could be seen as definitive.

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

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 materialise, for example if recipients of EU loans pay back all the money rather than default.

The largest share of the Brexit bill, €36bn, is to pay for EU infrastructure and social projects agreed by previous UK governments. Much of the rest consists of EU liabilities, including pensions and sickness insurance for retired EU officials, former EU commissioners and MEPs.

The government is also due a share of the EU’s assets, including €1.8bn in fines levied on companies. As the EU’s competition regulator, the Commission regularly fines rule-breaking companies and the UK is entitled to a share of any sums levied during its membership.

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

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

The final bill is not expected to be settled for many years, although the UK has the option to make earlier repayments.

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