UK continues to fill EU coffers
Jayne Adye once again exposes the facts regarding the masses of money the United Kingdom still owes the European Union – cash will be flowing out of the UK into Brussels for years to come. Regardless of whether we get a trade deal or not.
The overall figure the United Kingdom owed the EU as part of the so-called 'Divorce Bill' in 2018 was £39 billion. However, as of October 2020, the remaining money left to be paid stands at around £22 billion. This reduction of £17 billion comes as a result of the various extensions by both Theresa May and Boris Johnson because we continued to be a Member State up until January 31st 2020. Be under no illusion, the EU are still getting their £39 billion. What is more, we will also continue to pay in large sums for the duration of the Transition Period.
Because we passed the Withdrawal Agreement into law in Parliament, this money is legally owed to the EU. Even if we do not agree a free trade deal (an FTA) by the end of this year. However, even if there was no legal obligation, the Government has indicated their intention to pay this money regardless, as a sign of good faith between close allies. A sign of respect despite the very obvious fact the EU has given us very little in return. So, what is our remaining £22 billion being spent on?
The UK Government has agreed to continue to contribute to the EU's main overseas aid programme – the European Development Fund – until the current programme ends. This is estimated to be around £3 billion over the next 40 years and is included in the UK's commitment to spend 0.7 per cent of GDP on foreign aid (this is not extra aid money, but it falls under the 'Divorce Bill' and makes up part of the original £39 billion). While I am all in favour of finding ways to make our money go further, wouldn't this aid money be better spent helping suffering families right here in the UK?
Other areas where this money will be spent is on programmes the UK has already signed up to until the end of 2020 and beyond – e.g. EU funding for buildings and developments. The specific cost for individual projects is not readily available, however any projects currently underway in the UK will continue to receive EU funding until their conclusion. The total amount of money spent on this will be £19.2 billion, although UK projects have historically struggled to get EU funding in comparison with competitors on the Continent, so expect a minimal amount of this £19.2 billion to flow back into UK business.
This £19.2billion will be paid between 2020 and 2028 at an average of £2.4 billion a year. It should be noted some of this money may be written off if future projects are cancelled or scaled back, and as a result, the UK will not need to contribute towards them, so the amount to be paid would reduce accordingly.
Finally, around £4 billion will be spent on paying the EU pensions of previous employees (i.e. former MEPs and Commissioners like Nigel Farage, Peter Mandelson and Neil and Stephen Kinnock). Such payments will actually continue until roughly 2060!
On the bright side, the UK does not have to pay into the EU COVID-19 Recovery Fund, nor will we have to do in the future. This money is allocated from the EU's next 7-year budget in which the UK plays no part. We will also have no further spending contributions to the EU above the £39 billion unless we choose to do so by participating in EU programmes on a specific basis in the future.
When it comes to savings from Brexit, just remember, for the past few years the UK has contributed around £13.2 billion every year to the EU. This will be a direct saving after the end of the Transition Period. However, because we still owe £22 billion to the EU, on average £4 billion will be sent to Brussels every year for the next 4 years – money which should be going to UK businesses. After 2025 the savings will be much closer to £12.5 billion on an annual basis after pension payments etc are subtracted. However, this is still means 4 years with billions sent across the Channel, never to return.
Overall, with attention on the COVID-19 pandemic and the trade discussions it seems everyone has forgotten just how much money continues to flow into the EU's coffers from UK taxpayers. While many would think this money would stop in the event of a so-called No Deal, this couldn't be further from the truth. Now more than ever, with the economic hardship we are currently experiencing, shouldn't every penny we have be spent on causes within the UK instead of boatloads of money being shipped abroad?
