Academic shares concerns over the Brexit divorce bill – which is now over £40 billion

UNIVERSITY NEWS LAST UPDATED : 11 JULY

Research by Professor John Clancy at the Centre for Brexit Studies at Birmingham City University has revealed the EU Commission has added almost €1 billion to its claim for the EU civil servants’ pensions’ bill.

Professor Clancy explains in his latest blog for the Centre that this takes the Brexit Divorce Bill to £40.24 billion, not the £39 billion so many have quoted.

The EU annual accounts for 2018 have recently been published, and the Visiting Professor analysed them after warning in late 2018 that a sudden increase in the liabilities would come in July 2019.

In the 2018 accounts published right at the end of June, it appears that the EU commission has added €7.3 billion to the EU pension’s scheme bill, with the EU claiming an eighth of that from the UK upon Brexit. This section of the bill will now total £9.24 billion for EU bureaucrats’ pensions.

Added to the £31 billion from other payments the EU is claiming, this means the Brexit Divorce bill is £40.24 billion.

Professor Clancy severely criticises the EU for “Suddenly finding new handy ‘revaluations and recalculations” amounting to 7.3 billion.

He said: “A number cruncher in the commission suddenly seems to have added exactly 10 per cent to the existing bill. €7.3 billion has been added to the €73 billion in the accounts last year.”

He also points out that eight years ago in 2011, the liability was at €34.835 Billion, stating that it has more than doubled in the period.

In his blog, Professor Clancy points out that the EU has not given rebates in the accounts for service by civil servants which should not have been included when coming up with the liability figure.

He said: “If they are pretending this is a fund (which it isn’t) the UK should only actually be obliged to pay the full UK share of pensions paid to those who served as officials for their entire career post 1 January 1973. The UK should only have started paying its eighth share of full pensions only as recently as 2006.”

Professor Clancy also continues to make the case that there should be a zero bill for the Pension scheme on Brexit, stating: “The very principle of the EU pension scheme is that it is an in-balance scheme which is dealt with out of revenue and shared across member states according to the usual formula.

“The annual pension’s bill paid is covered off as an effective subscription payment. You pay it when you join the EU club and when you leave the club, you simply stop paying the bill.”

His research concludes by suggesting that in new negotiations over the summer that: “The EU pension’s bill is better removed in its entirety and left to later determination by legal processes which cover the correct ground and involve actual calculations. And in a legal forum acceptable to both sides."

He continued: “Any suggested £9.24 billion UK to EU payment has to come into play as part of access fees in trade deal negotiations. Until then a new negotiating team should negotiate it out of any deal entirely.”

The full blog post is available to read here.

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