When the UK leaves the European Union on 29 March 2019, the UK will pay a financial settlement to the EU. Negotiations surrounding the financial settlement are being led by HM Treasury. As part of the ongoing negotiations, the Prime Minister said the UK would honour financial commitments made to the EU during its Membership, and in December 2017 the UK and EU issued a joint report outlining agreed principles behind any financial settlement.
These principles included that the UK contribute to EU annual budgets until December 2020, and that the UK continue to pay off some of its liabilities to the EU, such as pension liabilities. In January the Chancellor of the Exchequer estimated the cost of settlement as between £35 billion and £39 billion.
In a new report, the National Audit Office found that although HM Treasury’s estimated settlement was reasonable, small changes to any of the assumptions they had made could increase it. They also found that the UK could have to pay up to £3 billion more in EU budget contributions than HM Treasury estimates, and that there are other liabilities relating to EU exit that are not reflected in the estimated settlement.
The Committee will ask senior officials from HM Treasury whether the final settlement could vary from the current estimate, how the Treasury will keep Parliament informed about any changes, as well what is not included in the estimated settlement and why.