Overseeing the UK’s withdrawal from the European Union is one of the biggest challenges that has faced any government. The cost to the UK of leaving remains uncertain because it depends on future events, such as the UK’s economic growth. There is a risk that the amount the UK actually pays will fall outside the narrow range estimated by the Treasury of £35 billion to £39 billion. The Treasury’s estimate does not include at least £10 billion of costs to the government on leaving the European Union associated with the settlement deal, including nearly £3 billion of contributions towards the European Development Fund. It also does not include potentially significant costs associated with the UK’s future relationship with the EU. The taxpayer could continue to make payments for years to come.
As new information becomes available the estimated value of the settlement may change. To have a meaningful Parliamentary vote on a withdrawal agreement later in 2018, Parliament and the taxpayer require an up-to-date estimate of the settlement’s costs, as well as better information on the wider potential costs of withdrawal. Without this, MPs and the taxpayer will not have complete information about the potential costs of the government’s deal with the EU. There is much talk of an EU dividend but our work has highlighted a number of as yet uncertain costs. Any dividend will be hard to calculate and, if it materialises, is some years away.
Published: 27 June 2018