The EU "divorce bill"

The latest estimate for the size of the UK’s ‘divorce bill’ upon leaving the EU is £33 billion (€36 billion). That was assuming the UK left the EU on 31 October 2019.

The often-quoted figure of £39 billion is what the bill used to be when the UK and EU first agreed on how the payment would be calculated. Since then it’s been revised down, not least because the UK’s exit from the EU was delayed until the 31 October. As the Brexit deadline has now been extended to 31 January 2020, we can probably expect a revised divorce bill figure in the future.

But while delays have reduced the amount the UK has agreed to pay upon leaving, “it does not change the overall amount that the UK transfers to the EU”, according to the Office for Budget Responsibility. That’s because part of the bill was always planned to include the UK’s regular membership payments to the EU budget as if it were still a member until the end of 2020.

So while the amount the UK has agreed to pay upon leaving has reduced, it isn’t currently set to pay any less money to the EU than it would have otherwise—part of it is simply being paid while the UK remains an EU member.

The government has previously said it expects to update the divorce bill figure once the UK leaves the EU.

What has been agreed?

On 11th December 2017, Theresa May confirmed that the UK and the EU had agreed “the scope of commitments, and methods for valuations and adjustments to those values.” The calculations are an estimate of the UK’s commitments to the EU, valued according to a set of agreed principles. The bill is made up of:

The UK’s contribution to EU annual budgets up to 2020;

Payment of outstanding commitments; and

Financing liabilities up to the end of 2020.

In November 2018, UK government and EU negotiators reached agreement over the UK’s withdrawal from the EU (the draft withdrawal agreement) which reaffirmed that the UK and EU have agreed that the UK will honour its commitments to the EU through a financial settlement.

That agreement was rejected three times by the UK parliament.

Boris Johnson then renegotiated the withdrawal agreement with the EU, though the divorce bill aspect remains unchanged from Theresa May’s deal. Mr Johnson’s deal has so far not passed parliament.