Let’s crack on and pay the £40bn Brexit bill, as long as we’re not taken for a ride
It has been widely reported that the UK is offering a ‘divorce bill’ of between £40 and £50 billion to the EU in exchange for progress on trade talks.
Unsurprisingly, this news is being met with howls of protest from many on both sides of the EU debate, but is it really that bad?
But look, I am a ferocious Leaver, and our exit from the EU has long been one of my foremost political goals even before I entered Parliament some 25 years ago. Experience of doing business in the EU and beyond taught me that we should be taking advantage of global opportunities.
My firm advocacy of Brexit however does not preclude me from recognising the political expediency of paying this so-called divorce bill. After all, it is standard business practice to buy yourself out of any contract.
Of course this is a lot of money. The Royal Navy?s new aircraft carrier, HMS Elizabeth, cost a mere £3bn by comparison. The 2012 Olympic Stadium meanwhile cost £537 million.
However, it is also true that in the context of our EU contributions, £44 billion isn’t a particularly astronomical figure. In 2016/17, the UK’s annual contribution to the EU budget stood at £12.2 billion after all the rebates were taken into account.
And since joining what was then the European Economic Community in 1973, we have paid a staggering half a trillion pounds in gross contributions.
In the past 10 years alone, the UK has paid close to £120 billion to the EU, even with the rebate.
And in 2020 and 2021, the first full years after we are due to leave the EU, it is estimated that our net contribution would have amounted to a further £31 billion.
With all these astronomic figures in mind, a one-off payment of £44 billion or whatever is not a particularly high price to pay, so long as it leads to a free trade deal between the UK and the EU and we pay not a bean thereafter. And remember: it wasn’t that long ago when figures of a £100 billion were being bandied around.
So while the outrage of many Leavers over this news is understandable, preserving our close commercial relationship with the EU is important to the interests of the UK economy.
It is also worth bearing in mind that paying this divorce bill does not preclude us from enjoying any of the benefits of Brexit.
We will still be able to make our own bilateral trade deals with the world’s largest economies. We will still be able to regain control of our borders and implement a sensible and fair immigration policy. We will still be able to repatriate legal powers from the ECJ in Luxembourg to the Supreme Court in London.
Meeting our already existing financial commitments to the EU will not affect any of these things. On the contrary, it will show that we are serious about maintaining a close future relationship with the EU after we have left.
It is bizarre that some Remainers are now acting as if Brexit was somehow ‘mis-sold’ to the public. Therefore, they argue, there is no point in us leaving at all.
It is ironic that these people who want us to remain in the EU and continue to pay £12 billion plus every year are complaining about a one-time payment before we leave!
We will still save hundreds of billions in the coming decades. If the reported £40 to £50 billion sum is correct, we will have already saved roughly that amount as a result of not being in the EU by the time of the next election.
Of course, agreeing to pay a divorce bill to the EU doesn’t mean we should let ourselves be taken for a ride. If EU negotiators try to continually ratchet up the final figure, that should to be resisted. And any payment is conditional on our getting a comprehensive trade deal ? otherwise, they should expect nothing.
There is however a sensible middle ground between being stubborn and bending over backwards.
This divorce bill will not be unconditional. If the EU refuse to budge on key red lines such as free movement or the customs union then we will be well within our rights to walk away and take the no deal option.
We’ve spent long enough time already negotiating over the negotiations. We need to crack on with Brexit and get this deal with the EU sorted as soon as possible. That’s what the British people want.
It is absolutely right that the government are exploring at paying this bill
It is high time that Leavers and Remainers alike move away from entrenched positions and start focusing on the national interest.