Brexit: Divorce bill could be £10bn higher than Treasury estimates, MPs warn

Influential committee raises alarm at 'narrow' estimates of money Britain would have to pay to EU

Britain could end up paying up to £50bn for the Brexit divorce bill because the government has underestimated the costs of leaving, an influential group of MPs have warned.

The Public Accounts Committee (PAC) said the Treasury’s previous estimates of £35bn to £39bn failed to take into account an additional £10bn of costs to the government, including £3bn towards the European Development Fund, which provides overseas aid.

Cross-party MPs also tore into the prospect of a “Brexit dividend”, saying any benefit from cash clawed back from Brussels was difficult to calculate and could take years to materialise. Critics have attacked Theresa May for claiming that a promised £20bn NHS boost could be funded partly by money the UK sends to Brussels.

The Institute for Fiscal Studies (IFS) and several senior Tories rubbished her claim that the government would have extra cash from leaving the EU – echoing the Leave campaign’s much-criticised promise to win back £350m for the NHS from the EU.

Britain’s divorce bill was one of the early stumbling blocks of the Brexit talks, as many Eurosceptics agreed with Boris Johnson, the foreign secretary, that Brussels could “go whistle” over the prospect of a financial settlement.

However, the prime minister managed to secure an uneasy consensus in December when she announced the Treasury and the EU had agreed a figure around £39bn.

In a new report, the PAC said Treasury estimates missed “potentially significant” costs such as setting up new post-Brexit customs and trade arrangements and participating in EU schemes after leaving the EU, which taxpayers could pay into for years to come.

Some payments could continue up to 2064, the committee claimed, which will infuriate Brexiteers who are keen to make a clean break with the EU.

Meg Hillier, Labour PAC chair, said: “The true cost of Brexit is a matter of outstanding public interest. Government must provide parliament and the public with clear and unambiguous information.

“Government’s narrow estimate of the so-called divorce bill does not meet this description. It omits at least £10bn of anticipated costs associated with EU withdrawal and remains subject to many uncertainties.

“Given these uncertainties, it is critical that parliament and the taxpayer are kept informed as agreements are reached and new information becomes available.

“A parliamentary vote on EU withdrawal will only be truly meaningful if this information is disclosed in a timely fashion.”

A Treasury spokesperson said: “As made clear by the prime minister last year, we will honour the commitments we made during the period of our membership of the EU.

“We have negotiated a settlement that is fair to UK taxpayers and ensures we will not pay for any additional EU spending beyond what we signed up to as a member.

“The National Audit Office confirmed in April that our estimated figure is a reasonable calculation. Now we are discussing what our future relationship looks like.”

The news comes ahead of a crucial few weeks for Ms May, as she prepares for a challenging EU summit on Thursday, where Brexit appears to be dropping down the bloc’s list of priorities.

The prime minister has also promised to publish a white paper setting out the UK’s vision for its future relationship with Brussels after an away-day with her top team at Chequers next month.