The Withdrawal Agreement Will Cost £75 Billion, Not £39 Billion

From our special correspondent, Lincoln Swann:

May’s £39bn WA will actually cost double that

May says her Withdrawal Agreement will cost £39bn but that’s a low ball bid, a bit like the “flight cost” from budget airlines.

£39bn gets the UK 21 months in transition & squares away roughly £20bn of EU overdraft and pension liabilities.

Add another £20bn
Within the agreement there is an option to extend transition for another 2 years where we keep making our contributions. If all is going well in our relationship with the EU that is likely to happen, and if all is going badly then… well the extension decision is going to be made by a “Joint Committee” whose meeting minutes are by default kept secret. The UK co-chair of that committee is yet to be declared but is likely to be a senior civil servant. A job for Ollie Robbins perhaps?

Add another £16bn
After the transition we drop into the backstop, where we stay until a trade deal is signed, we rejoin the EU, or the EU lets us out. Whichever way we keep paying for the EU projects we are participating in. What with everything else in the WA it’s going to be hard not to participate. The EU tells us that trade deals take 8 years +, so we are likely to be in the backstop for at least 4 years, at maybe £4bn a year.

There are a dozen other wrinkles in there that probably would add more cost. Like the fact that an extra 2 years in transition takes us part way into a 7 year committed funding round, during transition the overdraft will keep increasing, there is some mention of us chipping in for Galileo and the EU army, and so on, but let’s keep it simple.

OK so fag packet calculation somewhere north of £75bn is a more accurate low end cost for the Withdrawal Agreement. Expensive at half the price.

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WA Refs:
Article 132, 140, 142, 156, 164, Annex VIII Rule 10
Searching it using keyword “joint committee” is also enlightening.

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