Skip to content

Will the UK Pay £39 Billion to Leave the EU?

The long-running issue of how and when the UK leaves the European Union will soon be resolved. With the deadline of the 31st of October looming, there are still a number of matters to be concluded.

High on this list is the question of whether or not the country will need to pay the £39 billion that has been mentioned in the past. Right now, there is a difference of opinion between the British leader and the EU about whether this is due to be paid or not.

What Is This Bill?

The £39 billion is often known as the Brexit divorce bill. This is the financial settlement that was negotiated between the UK and the EU.

It is to be paid to finalise the country’s financial obligations at the time of Brexit. This means that it is due to be handed over after the 31st of October. Importantly, the settlement of this bill isn’t legally binding until the UK Parliament gives its agreement to the Withdrawal Agreement.

There are differing opinions on what this figure actually represents. However, the overall view was that it would help to ensure that the country’s relationship with other EU member states would remain healthy.

What Is the British Point of View?

It was mentioned by Brexit Secretary Dominic Raab in 2018 that this bill would not apply in the case of a no-deal Brexit. With the possibility of this being the case now looking greater than before, the question of the Brexit divorce bill has come into the spotlight once again.

Indeed, Prime Minister Boris Johnson has confirmed that they will not pay the £39 billion if a no-deal Brexit is the outcome. This matches his statement from 2017, when he said that Brussels should pay any bill rather than the UK.

With the troublesome matter of the Irish border still raising concerns, Johnson pointed out that without any sort of agreement, the full amount bill “is no longer, strictly speaking, owed”.

He went on to say that this would mean that there would be “very substantial sums” available for investing the UK’s priorities instead. This extra money is likely to be welcomed by the majority of business leaders. With Brexit causing concerns among investors and the business community, subjects such as international commercial debt recovery services are on many people’s minds.

What Is the EU Point of View?

On the other hand, EU statements on the matter have always insisted that the full divorce bill would be due even in the event of a no-deal Brexit. This is because they are of the opinion that it covers financial obligations that the UK has already entered into.

EU spokesperson Mina Andreeva has been quoted as saying that all commitments from all of the member states need to be honoured. She went on to say that this is “especially true in a no-deal scenario”, as they expect the UK to honour the commitments already made by them. 

In the event of an agreement being reached over Brexit, it is clear that the divorce bill needs to be paid in full. However, if it comes down to a no-deal exit then the question of the £39 billion is going to be among the most important issues to be resolved.