Brexit divorce bill 'could be an extra £8.8 billion'

There could be an extra £8.8bn extra bills on top of the £39bn cost of Brexit, a report has disclosed
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An extra £8.8 billion could be added to Britain’s “divorce bill” for leaving the EU, a House of Commons Library report has disclosed.

Potential bills on top of the official Brexit payments of up to £39 billion include financial guarantees extended by the European Union to member states and external countries.

Although Government officials said the risks were “remote” and were made clear when the deal was announced on December 8, the figure came as a surprise to MPs.

Tory MP Robert Halfon told the Evening Standard that the Brexit bill had become “a moveable feast”, while Peter Bone, a leading Brexit-backer, said the public would be “upset”.

The row broke as Theresa May chaired the first formal discussion by the Cabinet’s big beasts about what sort of post-Brexit trade deal they want.

Foreign Secretary Boris Johnson pre-empted the debate by saying Britain risked becoming a “vassal state” of the EU unless it seized the right to set its own rules in future.

Chancellor Philip Hammond was arguing for a closer relationship to maximise trade, including the retention of most single market regulations.

The briefing note for MPs by the Library, Parliament’s renowned team of impartial experts, stated: “It appears that the UK Government’s estimate does not include contingent liabilities. If included, these liabilities - which are dependent on the outcome of uncertain future events - add around Euro 10 billion [£8.8 billion].”

The Government says the “vast majority” are loans and guarantees made by the EU to member states like Ireland, Portugal, Spain and Greece, such as aid given after the 2008 crash under the European Financial Stabilisation Mechanism.

A smaller share is from EU loans to “strategically important” non-member states like Tunisia and the Ukraine. The potential costs were left out of the Government’s main estimate of an exit bill of between £35 billion and £39 billion on the grounds the risk of default was very remote.

Mr Halfon, MP for Harlow, said: “Our post-club subscription payments to the EU seem to be becoming a moveable feast only to be dined upon by Juncker at al. The EU are welfare junkies to our ever-decreasing coffers.”

Mr Bone said: “Everyone was led to believe the total would be a maximum of £39 billion. People will be very upset if the total bill could be 25 per cent higher. For me, it is another reason to leave on global trade terms and pay nothing.”

A Treasury spokesman said “It is completely misleading to suggest that contingent liabilities are at all likely to cost the UK an additional £10bn.

"We have an agreed methodology with the European Commission which is reasonable and fair. Loans to countries such as Ireland are already factored into UK accounts.”

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