Reality Check: Will the UK pay a 60bn ‘divorce bill’? – BBC News

The claim: The UK’s “divorce expense” from the European Union might be as high as 60bn (52bn).

Reality Check decision: Yes, it could. Is that most likely to be the last figure? Probably not. The fight over the cash will start with legal arguments however will end with hard-nosed politics.

To get to any prospective figure you need to exercise a worth for all the EU’s liabilities – the cash it owes – at the point that the UK is most likely to leave.

Then you deduct the worth of the EU’s properties, and choose exactly what portion of the balance is the duty of the UK.

One method of determining this portion is to utilize the UK’s typical share of EU spending plan contributions, which is approximately 12%.

Alternatively, the European Commission may argue that the UK’s share ought to show the size of its economy, which provides a figure more detailed to 15%.

The commission’s working out group has actually made no public talk about how it plans to determine the expense of the divorce arrangement, however there is definitely a method to obtain to a figure of 60bn.

Some authorities have actually stated this is most likely to be the preliminary figure that the commission will place on the negotiating table.

If they do advance that figure, the most significant part of the costs would be comprised of the UK’s share of exactly what is referred to as the reste a liquider (RAL), which is, in result, the EU’s charge card expense.

This is cash that has actually currently been devoted by the EU, for which the expenses have actually not yet been paid.

By the end of 2018, it is approximated, the RAL will be more than 240bn, so the UK’s share would be significant.

Another big piece of the possible costs is comprised of loan due to be invested over the next couple of years, much of it on huge facilities tasks in poorer EU nations.

In the commission’s view, the UK has actually currently made a lawfully binding guarantee to money this financial investment, even if it takes place after the UK has actually left.

The 3rd huge product on the program is the expense of pension advantages for EU authorities.

The present overall liability is 63.8 bn, and the commission will anticipate the UK to pay its share.

Nice wine rack

But if the UK needs to take its share of liabilities, it is likewise entitled to a share of the EU’s numerous possessions, which deserved 153.7 bn at the end of 2015.

Some of those might be utilized to balance out the liabilities, consisting of EU structures, satellites, as well as a rather good wine rack.

Some Brexit fans, not in federal government, state that the UK must pay absolutely nothing, and they indicate legal viewpoint that backs them up.

A House of Lords report concluded that Article 50 enabled the UK to leave the EU without being responsible for impressive monetary commitments under the EU spending plan.

And the project group Lawyers for Britain argues that it is difficult to see any reputable basis upon which the UK would be required to make net payments to EU pensions or continuous spending plan programs.

Instead, it states, the UK needs to look for the return of cash it has actually paid to the European Investment Bank, which deserves 9bn.

All the figures in the divorce settlements are most likely to be controversial and objected to.

Speaking on a scandal sheet of BBC Question Time, Brexit secretary David Davis stated he had actually seen no description for the 60bn figure.

He stated the UK would “fulfill our global responsibilities, however we anticipate likewise our rights to be appreciated too”.

“I do not believe we’re going to be seeing that sort of cash modification hands.”

The figure of 60bn might be politically impractical, however the remainder of the EU will not concur an offer under which the UK leaves without paying anything.

The UK could, obviously, leave with no offer, although that would most likely indicate everybody winding up in court.

Chancellor of the Exchequer Philip Hammond has actually stated: “If we do have any expenses that are up to be paid we will undoubtedly handle them in the appropriate method.”

If compromise can be accomplished, and if payment of the costs were to be topped several years (as pensions end up being payable for instance), the quantities included might not be that substantial financially.

But this is a problem that has the possible to trigger bitter political battles.


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Originally released at: http://www.bbc.com/news/uk