Confusion over cost of Brexit divorce bill lingers

There is more confusion over the final cost of Brexit, with a report from the National Audit Office calling into question the certainty of the government's estimate of £35-39bn.

While the figure put forward by the Treasury was "reasonable", the estimate is based on a number of assumptions which could change, leaving the final figure wildly out. Factors such as the UK's economic performance in 2019 and 2020, how much EU funding UK organisations will receive after Brexit, the cost of the future pension liability and potential changes to the exchange rate all pose potential variables.

The NAO said even relatively small changes could alter the total paid. On top of that, the Treasury's estimates do not include things like the £2.9bn cost of the European Development Fund.

And the estimate takes into account the £7.2bn income the UK private sector receives from the EU directly, which will not go into the governments accounts.

Amyas Morse, the head of the NAO, said today: “We have reviewed the Treasurys estimate of how much the UK will pay the EU under the draft withdrawal agreement. The estimate reflects a number of moving parts, so the range of costs in it could have been wider than £35 to £39bn. But overall we think it is a reasonable estimate.

“As the vote on the draft withdrawal agreement approaches we expect that government will provide a substantial amount of material for Parliament to consider. We will support Parliament in this scrutiny by providing independent assurance.”

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CityAM

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