Brexit will cost the UK £39 BILLION

Elizabeth Elden
8th December 2017, 4:30 PM
  • ‘Divorce’ settlement will cost the UK billions
  • “Hard won agreement in all our interests”
  • Dramatic pre-dawn scenes last night ended first stage of talks
  • Next stages to start as early as Thursday
Theresa May and Jean-Claude Juncker announced a huge step in negotiations today. Image: Getty

The UK will have to pay between £35-39 billion in order to leave the EU, estimates a top UK source.

The size of the divorce bill was leaked after European Commision President, Jean-Claude Junker, announced that he is recommending leaders of the remaining 27 EU nations to give a green light to start trade talks next Thursday.

Theresa May has called the breakthrough a “hard-won agreement in all our interests”.

After weeks of first stage negotiations, they may finally be able to get to the second stage of negotiations.

The start of Brexit official began on the 29th of March 2017, when Article 50 was triggered.

From this date the UK has two years to leave the EU with a deal, meaning we have just over 15 months to get through the second, harder, stage of negotiations.

May and Brexit Secretary David Davis, who earlier admitted there are no impact assessments for the UK leaving the EU, flew to Brussels early this morning to confirm negotiations with Mr Junker.

The negotiations focused on contentious issues like citizen’s rights, the Irish border, and the cost of Brexit, but the statement is vague on these.

Provisions on citizen’s rights would allow EU nationals in the UK to “go on living their lives as before”; the financial settlement will “be fair to the British taxpayer”; and the agreement on Ireland will guarantee “no hard border” between Northern Ireland and the Republic.

Although the figure Britain will have to pay is huge, it is significantly lower than suggested by previous leaks, which put it at £50 billion or more.

This figure is much higher than the amount of money allocated to Brexit in the Budget, however.

The Chancellor, Philip Hammond, set aside just £3 billion for Brexit over the next three years, almost double the money allocated to the NHS.

The eye-watering figure will cover Britain’s share of the EU’s budget up to the end of 2020, as well as outstanding debts and liabilities that Britains owes.

It will be paid over several years, and an exact number will be unknown until the end of negotiations.

This will mean that any predicted saving for Britain by leaving the EU, will not materialise for years to come, and in the meantime will mean less money to spend on other public services, like the NHS.

The infamous Brexit bus promised £350 million to the NHS- this won’t be happening any time soon. Image: Getty

Final details of the agreement were thrashed out in the early hours of this morning by May and DUP leader Arlene Foster.

Foster has been a thorn in the side of EU negotiations, blocking a previous version of the agreement on Monday with a last-minute objection to provisions over the Northern Irish border.

May said that the process of arriving at a deal “hasn’t been easy for either side”, despite insisting on Wednesday during PMQs that negotiations were going well.

The agreement reached today fails to cover an overall trade deal between the UK and EU, this is expected in the second round.

The joint report published by May and Juncker says the UK will maintain “full alignment” with elements of the EU single market and customs union, and will support the economy of the island of Ireland and the Good Friday Agreement.

The financial settlement that the UK will pay will be drawn up and paid in Euros, so due to the unstable nature of the GBP since Brexit was voted on, it will be unknown how much this will cost until it is being paid.

Donald Tusk, the European Council President, said of the agreement, “While being satisfied with today’s agreement, let us remember that the most difficult challenge is still ahead.

“So much time has been spent on the easiest part of the task, and now to negotiate the transition agreement and the framework for our future, we have de facto less than a year.”

There have been severe criticisms of how May has handled negotiations so far.

Shadow brexit secretary Keir Starmer said, “Theresa May must seriously reflect on her approach to negotiations so far.”

Ex-Ukip Leader Nigel Farage was pleased with the outcome of the negotiations, saying, “A deal in Brussels is good news for Mrs May, as we can now move on to the next stage of humiliation.”

Brexiteer Nigel Farage has dismissed May’s efforts as humiliating. Image: Twitter

The Commission’s announcement that trade talks, the next stage in negotiations, can finally begin, was welcomed by business leaders.

They had previously warned that companies would begin plans to move staff and business abroad if no progress was made by Christmas.

What Does This Announcement Really Mean?

For now, it isn’t hugely clear what the negotiations mean.

It is a positive step in the path to Brexit, as the sluggish pace may finally be sped up slightly.

The main things to take away are that there won’t be a hard border around Ireland, and EU citizens won’t be forced to leave the UK.

Although the figure of £35-£39 billion is an estimate, it is an accurate one, and much higher than Theresa May said it would be in September.

The UK will have until it leaves the EU in 2019 to pay this amount, and it will cover the UK’s commitments to the EU until the end of 2020.

In terms of your finances, this money will come from the UK’s budget and money already sent to the EU, so your taxes will be paying this cost.

It could also lead to stage two of negotiations, focusing on trade and security.

The UK will try and remain a member of the customs union, meaning that if you buy something from an EU country, you will not have to pay extra customs fees to have it delivered to the UK.

The UK is also expected to try and remain under the jurisdiction of the European Court of Justice, according to leaked papers.

However, this will only happen if the other 27 member states agree to what has been discussed today, so until Thursday, the agreement made today isn’t certain.

What do you think of the deal announced today? Let us know in the comments!

Comments
Tom
Tom
Founder
1 year ago

Fantastic round-up, thanks Lily. A big part of me just wants Brexit to be done with so we can move forward.

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