Public Accounts Committee report: Exiting the EU – The Financial Settlement

Payments by the UK to meet the estimated £8.6 billion liability for its share of EU staff pensions and post-employment sickness benefits could last until at least 2064.

This is according to the June 2018 report from the  Public Accounts Committee on the estimated value of Brexit.

The report finds:

  • 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.

The Public Accounts Committee recommends:

  • The Treasury should write to the Committee providing an updated estimate of the settlement’s value before the Parliamentary summer 2018 recess, and then at least annually following any significant new data becoming available after the UK’s withdrawal from the EU
  • The Treasury should, within four months of this report, set out the assurance arrangements that it has put in place to ensure that the UK does not pay more than it owes, including how and when it will appoint its auditors
  • The Treasury should set out the factors it will take into account when deciding the value for money of settling the UK’s pension and post-employment sickness benefit liability early
  • The Treasury should ensure that the UK continues to have sufficient input into the key EU institutions responsible for ensuring the accuracy of the EU’s financial information, particularly the European Court of Auditors, until the transition period finishes
  • The Treasury should provide the Committee with details of the sensitivity analysis it has performed on the £35 billion to £39 billion settlement value.

Read the full report.