, 9 tweets, 4 min read Read on Twitter
A lot of guff today (only a little of it from Boris!) on the £39bn #Brexit ‘divorce bill’ which the UK is expected to pay as part of May's deal. The key point is that the £39bn is meant to honour commitments *already made* during the period of the UK’s membership... (1/8)
It is therefore simply wrong for #Remainers to claim that the £39bn is a ‘cost’ of Brexit that we could avoid by staying in (and that it should have been on the side of a bus too). In reality, the £39bn is money the UK would have had to pay anyway, even if still a member… (2/8)
However, it would also be wrong to assume that we would save the whole £39bn by leaving with #nodeal. I’m well aware that many experts (including a HoL committee) have argued that the UK would be on strong *legal* ground if we decided to walk away without paying a penny… (3/8)
… but I don’t think withholding the £39bn would provide as much leverage as many believe. Even £39bn would be less than 2% of one year’s UK GDP (actually spread over many years), and just a few tenths of a percent of the GDP of the rest of the EU. They may not miss it. (4/8)
What’s more, the goodwill of the rest of Europe will still be important in a #nodeal scenario (and perhaps even more so). Third countries looking to do trade deals with the UK might also be unimpressed if we appear to go back on promises made to former partners in the EU. (5/8)
Nonetheless, I still think it’s right to attach conditions to the £39bn, even now. For example, we could confirm that we will pay the UK’s regular annual contributions until the end of 2020, plus something for pensions, come what may... (perhaps half the £39bn in total). (6/8)
This would go a long way towards meeting May’s Florence ‘goodwill’ pledge, which was that our partners shouldn’t fear “they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave”. (7/8)
But we would only commit to paying the other half of the £39bn if the UK and EU agree a satisfactory long-term relationship, including a comprehensive FTA and streamlined customs. This seems more reasonable than simply walking away, and more likely to achieve a better deal. (8/8)
PS. we don't know if the #Brexit divorce bill would be £39bn - that's only the top end of an initial Treasury estimate. Here's a good explanation from the @OBR_UK March 2018 EFO. The OBR's guess then was actually £37.1bn, but the real number could be lower - or a lot higher...
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