UK’s Brexit divorce bill stood at ?36.7bn in 2021, EU audit reveals

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The UK’s Brexit “divorce bill” stood at EUR41.8bn (?36.7bn) in 2021, according to the EU’s official auditors.

The European court of auditors’ annual report revealed that the UK was expected to make EUR10.9bn in payments to the EU during 2022.

The Brexit divorce bill was down from EUR47.5bn (?41.7bn) in 2020, reflecting payments made by the British government.

Tony Murphy, the president of the European court of auditors, said the final amount the UK pays to the EU was not expected to change much. “Overall it’s pretty stable; there could be some adjustment, but I don’t think it will be that significant.”

EU estimates of the Brexit financial settlement have tended to be higher than those of the British government, which forecast Brexit spending commitments between ?35 and ?39bn.

The Treasury, however, in July revised the Brexit bill upwards by ?5bn, from ?37.3bn to ?42.5b, blaming the rising cost on meeting the UK’s obligations to pay EU staff pensions.

The Brexit financial settlement largely consists of EU projects the UK agreed to co-fund during its time as a member state, a category worth EUR28.6bn, according to the court of auditors. The second largest component, EUR14bn, is the cost of EU staff pensions, reflecting liabilities incurred during Britain’s 47 years of membership. Smaller elements include loan guarantees offered by EU member states, including the UK, to countries such as Ukraine.

When Britain left the EU on 31 January 2020, it had agreed a way to calculate the divorce bill, but not a figure. The final total depends on variables such as projects being cancelled, actuarial estimates changing, and EU loans going bad.

The report was published amid an improvement in EU-UK relations. Liz Truss, in contrast with her domestic troubles, smoothed relations with European neighbours last week by attending a European summit in Prague that brought together EU and non-EU countries to discuss the war in Ukraine.

EU diplomats, however, say they have few illusions about her stance on the EU. The government’s emollient tone on the Northern Ireland protocol is attributed to its domestic troubles and turbulence on financial markets, which are seen as reducing appetite for a trade war with the EU.

A UK government spokesperson said: “These figures were originally published in the EU’s 2021 annual accounts and are consistent with the Treasury’s latest estimates. We recognise the importance of ensuring that taxpayers’ money is well spent and are committed to transparency – we regularly report these figures to parliament.”