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The Brexit divorce bill negotiated by Boris Johnson has increased by nearly £10 billion compared to the official estimate when the UK left the EU, ministers have admitted.
The Treasury slipped out an “updated government estimated of the financial settlement” in a written ministerial statement on Thursday as MPs headed back to their constituencies for summer recess.
The statement, from chief secretary to the Treasury Simon Clarke, says the bill is now £42.5bn, which “shows an increase against the original range”.
When Britain left the EU in January 2020 the Office for Budget Responsibility put the figure at £32.9 billion, meaning the cost of the financial settlement has soared by nearly £10 billion.
In the statement the minister insisted that the figure should be compared to the “original range” of £35-39bn, which would make for a smaller but still substantial increase of around £4 billion.
The timing of the Treasury’s statement at the start of the summer recess means MPs will be unable to hold ministers to account for the increase in the Commons, because it will not be sitting.
The Treasury says the increase is “primarily due to the most recent valuation of the UK’s obligation under Article 142 for EU pensions”.
The government pledged to pay its share of EU official pensions as a condition for getting a withdrawal agreement and avoiding a no-deal Brexit.
The increase in these payments is related to higher inflation, which has soared to record levels in recent months.
The Treasury also said in the statement that it does not plan to release further estimates of the bill, even if it increases further – and that the actual costs will be buried in departmental small print.
“As all payments will be made from departmental accounts HM Treasury do not plan to replicate or consolidate financial reporting on the TCA in future editions of the statement,” the minister said.
“Nor do we intend to report annually our revised estimate of liabilities expected under the TCA, because actual costs will, in future years, appear in the departmental resource accounts.”
More follows…
