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Chancellor will reveal cost of Brexit in next week’s Spring Statement

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Written by: Tim Chen
09/03/2018
The Office for Budget Responsibility will release its full estimate of Brexit bill immediately after Chancellor's speech
Chancellor will reveal cost of Brexit in next week’s Spring Statement

A full cost estimate of Brexit to public finances will be revealed when Chancellor Philip Hammond delivers his speech in the Spring Statement on 13 March.

The Office for Budget Responsibility (OBR) will publish its estimates on the total financial obligations facing the UK in an annex after the chancellor completes the statement, as well as the economic and fiscal outlook for the UK.

While the British government has already set aside £35-£39bn for the divorce bill, the Centre for European Reform (CER) has estimated the cost could range from £22bn – £65bn.

A spokesperson for the budget watchdog said it is finalising the details ahead of the statement, but confirmed that the release will include a forecast of yearly payments from the UK to the EU.

“The premise of this is that we can incorporate information that is known and agreed, in line with the joint report published in December,” said the spokesperson.

He continued: “The new information will be what we estimate how the contribution profiles might look like from a numbers perspective.”

Broad brush

In line with the joint EU-UK report, the figures will include the contributions to the EU budget that the UK has agreed to make until 2020, as well as long term liabilities such as pensions.

“The forecast will stretch over quite a horizon, but [the contributions] will taper off in the near-term, with some payments going on for a few more years.”

However, the OBR figures will not include estimates of the costs for the UK to stay in certain EU institutions such as regulatory agencies.

The spokesperson continued: “We don’t have any information on what agencies the UK will contribute to or all the outcomes of the negotiation.

“Where we don’t have a final decision from the negotiations on the future relationship, we will continue to use a broad brush assumption.”

The Spring Statement will be delivered by Chancellor Philip Hammond next Tuesday, 13th March.

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