Brexit divorce bill 'could soar by £5bn' if transition period extends beyond 2020

Posted On: 
22nd February 2018

The UK’s Brexit divorce bill could cost an extra £5bn if the proposed transition period runs beyond 2020, according to the head of an influential group of MPs.

The Commons Committee was told that the additional costs of extending the transition period could be up to £5bn.
PA Images

It comes after the UK's draft negotiating guidelines left the door open for the transition period to be extended if it was felt that the necessary arrangements had not been made for the future relationship between the UK and the EU.

The chair of the European Scrutiny Committee, Bill Cash, claimed that the deal struck last December between the UK and EU over payments into the EU budget only lasts until the end of 2020, and if the transition period extends beyond that point, the UK may need to continue making financial contributions.

Government risks Brexit backlash with plans for ‘indefinite’ implementation period

EU net migration falls below 100,000 amid continued slump in wake of Brexit vote

The veteran eurosceptic was speaking as his committee took evidence this morning from the UK's top Brussels diplomat, Tim Barrow, and Brexit minister Robin Walker.

“If the transition lasts beyond 2020, this could require the UK to make payments into the EU budget for 2021 as well," Sir Bill said.

“From January 2021, we would then be paying into the EU’s long-term budget. The net result of this that the additional costs could run into billions of pounds, and the estimate is between £4-5bn.”

Sir Bill said that the transition period was starting to look “as long as a piece of string” and that the new figures had appeared like something out of “Roald Dahl’s Tales of the Unexpected”.

Mr Walker admitted that while details of the implementation period were still being negotiated, the Government had no intention of extending the proposed transition.

He said: “The discussion around the date is a question of converging two positions, which are really quite close to each other, in terms of the overall time being around two years”.

Sir Tim also defended the current position, arguing: “We have always said around two years…as Michel Barnier has said, this is a convergent position, and the end of 2020 falls square between the remit.”