Checkout Ma’am? That’ll be €60 billion
According to Suzanne Lynch in the Irish Times, the word around Brussels is that the UK will be handed a final bill for up to €60 billion, “taking into account everything from pension liabilities to committed budget funds” in its Brexit negotiations. It may not end there. German finance minister Wolfgang Schauble is quoted as saying that Britain could face billions in EU payments even after the divorce decree takes effect. I don’t remember any of that playing a role in the referendum debate: maybe it was on the other side of the big red bus that said there would be £350 million a week coming back for the National Health Service. Yet some sort of realism is finally breaking out in London. Chancellor Philip Hammond says government borrowing will be £122 billion higher than forecast in March: the claim by City of London economists that a Leave vote would put £100 million on borrowing was rubbished by Brexiteers in May and June. The Office of Budget Responsibility (set up to take political trickery out of the budget process) says the negative impact of leaving the EU will be £58 billion, provided the path to Brexit is not “bumpy”. The Institute for Fiscal Studies broke that down at £1250 per UK household: IFS director Paul Johnson said people faced the “dreadful” prospect of more than a decade with no growth in their real incomes: “We have certainly not seen a period remotely like it in the last 70 years.” Then there’s the little matter of paying current EU contributions with devalued sterling (see BBB item 15th November). Lynch’s article notes remarks by British Foreign Secretary Boris Johnson that Britain will leave not just the Single Market but also its customs union with the EU. The significance of this issue was set out in an article in the Economist magazine (see “Single market versus customs union”, BBB 19th November 2016). The question is, has Boris read the article and did he get it?