Why has everyone forgotten the EU’s £39 billion Divorce Bill demand?
And why are we still going to sign the EU's open-ended invoice?
© Brexit Facts4EU.Org 2020
Brexit Facts4EU.Org reports on latest official estimates for more decades of subsidising the EU
Most readers would say that sums in the order of £40 billion pounds are significant. At Brexit Facts4EU.Org we would tend to agree.
As we have reported many times, the revised Withdrawal Agreement negotiated by the new Johnson Government made absolutely no changes to Mrs May’s Withdrawal Agreement (WA), apart from the Northern Ireland Protocol (removing the ‘Backstop’). This includes the so-called “Financial Settlement” to which Mrs May agreed.
The proof is in the wording of the latest WA itself and has been confirmed in the latest House of Lords report (“Brexit: The Financial Settlement”) as well as by the House of Commons Library report published on Monday of this week.
Brexit Facts4EU.Org Summary
“The updated Withdrawal Agreement published on 17 October 2019 made no changes to the terms of the financial settlement”
- The House of Lords European Union Committee, 2nd Report of Session 2019–20
“The terms of the financial settlement are the same in both the Withdrawal Agreement negotiated by Theresa May’s Government and the latest version.”
- House of Commons Library, 06 Jan 2020
Would you sign an open-ended invoice?
As we have stated in previous articles, an essential element of this divorce bill demand from the EU is not only its very dubious basis (for a country which has effectively subsidised the rest of the EU for every decade of its membership) but also the fact that the eventual bill will be decided by the EU.
Here is what the National Audit Office had to say
“The precise value of most components of the settlement is subject to future events and therefore uncertain”
The NAO also stated that “relatively small changes” to the assumptions used by the Government could mean the estimates of the size of the eventual bill could vary outside the headline figure used by the Government. In particular they highlighted that the long-term EU pension liability is “subject to significant uncertainty”.
- National Audit Office, Exiting the EU: The financial settlement, 20 April 2018
The true cost will not be what the Government says it is
MPs are now being told that:
“It is estimated that the settlement may cost the UK around £30 billion by the time the final payment is made, possibly in the 2060s. A definitive figure can’t be produced for the final cost as it depends on future events.”
- House of Commons Library updated report, 06 Jan 2020
The difficulty with this new estimate is that it does not cost include the cost of Parliament having delayed Brexit. The most obvious omission is that it does not include the monies sent to the EU for the months and years after the UK was already supposed to have left the EU. These alone would take the figure over £50bn. Neither does it allow for the huge uncertainties mentioned above.
The UK will continue to pay into EU’s “off-the-books” funds
As usual, the headlines will not mention the monies sent to the EU – and which will continue to be sent to the EU under the new Withdrawal Agreement – for the EU’s various “off-the-books” funds. The EU refers to these as “off-budget”, and they have conveniently never been included in any headline government figures for the UK’s net contributions to the EU, ever.
Brexit Facts4EU.Org has repeatedly reported on these EU “off-the-books” funds, which include the “European Development Fund”, EU Trust Funds, and “The Facility for Refugees in Turkey”. These are all multi-billion pound EU funds of which the public remains blissfully unaware.
It is worth noting that the EU has never been able to produce any legal justification whatsoever for any ‘divorce bill’.
On the other hand, legal opinions from the House of Lords European Union Committee and from Lawyers for Britain all found there to be no legal case for the EU to demand anything.
As we have said before, if the EU had had any legal case, they would have been the first to shout about it.
Instead, timid Theresa and her Remainer civil servants happily agreed to the principle of a divorce bill, and the latest Withdrawal Agreement agreed by Mr Johnson’s Government continues to allow the EU to claim vast sums over the coming years and decades, with the EU deciding the amounts payable.
If any agreement for the UK to help the EU out with an ex-gratia payment were to be conditional upon the agreement of a sensible trade deal, we could understand. Sadly that is not the case. The signing of the Withdrawal Treaty on 31 January will make the divorce bill into a legal obligation.
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[ Sources: The Withdrawal Agreement | House of Commons Library | House of Lords European Union Committee | National Audit Office | Office for Budget Responsibility ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, 09 Jan 2020
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