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Q&A: What is the Brexit ‘divorce bill’ and how much will it be?

We answer a few questions about the financial contribution the UK will make to the EU as it leaves the bloc of nations.

Theresa May is meeting with key Cabinet ministers to discuss Britain’s EU “divorce bill” as the Brexit negotiations enter a crucial phase.

(PA Graphics)
Q. What is the bill for?

The bill is supposed to settle the UK’s accounts with the EU when it finally leaves in March 2019. Theresa May has said Britain will continue to pay into EU coffers to the end of the current budget period which finishes in 2020 as well as honouring its outstanding financial obligations.

Q. What are those obligations?

This is what the two sides are currently trying to nail down. They include staff pension liabilities while the EU also wants the British to stump up its share for future programmes for which funds have already been allocated but which will not start until after the UK has left the bloc.

Q. How much does that all add up to to?

The cost of paying into the EU budget has been put at £18 billion (20 billion euros). Reports have suggested that Mrs May is prepared to accept further commitments adding up to around £20 billion (22.5 billion euros) taking the total somewhere close to £40 billion (45 billion euros), although No 10 has described the figure as “speculation”.

Q. Will that be enough to satisfy the EU?

It falls significantly short of the 60 billion euros (£53 billion) which Brussels is reportedly looking for. For the moment, EU negotiators are not seeking an actual figure, but they do want clarity on which liabilities the UK accepts it has to meet.

Q. What if they do not get that clarity?

European Council president Donald Tusk has said that unless there is progress by the beginning of next month, EU leaders will not be able to give the go ahead for talks on Britain’s future relationship with the EU at their December summit. That would mean trade talks could not start until March at the earliest – and would almost certainly lead to calls for Mrs May to walk away from the negotiations altogether.

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