The UK's Brexit divorce bill from leaving the European Union could rise to £42.5bn, potentially adding billions to payments, the government has said. Treasury minister Simon Clarke stated that inflation meant the bill could be up to £7.5bn higher than initially estimated.
Originally, the government estimated the bill, which covers spending commitments made during the UK's membership of the EU, would be between £35bn and £39bn. A ministerial statement published on Thursday this week as Parliament broke up for summer says 'the latest estimate of £42.5bn shows an increase against the original range'.
Mr Clarke's statement says the increase is 'primarily due to the most recent valuation of the UK's obligation under Article 142 for EU pensions'. He cited assumptions about inflation as one of the main drivers of the increase, but noted that 'given this is a multi-decade liability, the variables used in this forecast will continue to fluctuate up and down'.
The Brexit divorce bill, agreed to by Prime Minister Boris Johnson's government, covered pension contributions for EU staff, as well as funding for three of its research programmes. Meanwhile, the EU will pay back money the UK committed to the European Investment Bank and the European Central Bank, among other things.
Liberal Democrat foreign affairs spokesperson Layla Moran said: 'This Conservative government's terrible deal, backed by Liz Truss and Rishi Sunak, is costing British taxpayers billions of pounds. This is the price of years of Conservative chaos and neglect.' She urged ministers to 'come clean about how much more their bad deal will cost the country in future'.
A Treasury spokesman said: 'The unprecedented recent rise in inflation and changes in discount rates have increased our pensions liability, which is the biggest reason for the increased estimate. The true cost of the settlement is confirmed when payments are made, based on the value at the time.'
