A revised estimate – the financial settlement with the EU

Since we published Anthony Scholefield’s Futurus Briefing paper on the financial settlement with the EU, the author has undertaken some further research which has resulted in a revision to the original document. The revised version can be downloaded here.

It should be pointed out that the headline figures, suggesting that the EU owes us a refund, have not been revised, but  extra background information, such as our realistic future pension liabilities, has been added.

The latest Futurus briefing paper – the financial settlement with the EU

CIB Committee member Anthony Scholefield has published his latest briefing paper entitled The financial settlement with the EU. This is a most timely contribution to the very topical debate about the Brexit divorce settlement.

The paper takes as its starting point an earlier analysis by Institute of Chartered Accountants of England and Wales (ICAEW) whose report was highlighted on this website a few months ago.

This august body assessed our assets and liabilities to the EU, concluding that the rumoured exit fee demanded by the EU was far higher than could be justified.

The Futurus paper goes further and states that actually, the EU owes us a refund. The gist of the argument is  that the UK should not be liable for any “authorised spending not yet incurred” by the EU, which amounts in total to £28 billion. It also raises the issue of the development of  the “intellectual property”  of the EU, such as the cost of constructing databases, building up regulatory systems, and so on. These are not included in the calculations but the  UK contributed a great deal to these matters and will probably now have to build its own systems. It can legitimately claim to be recompensed for the asset which is not recognised in the EU accounts.

At a time when discussion of the final exit settlement is reaching a critical stage, this short and readable analysis is a useful contribution to the debate.

New research paper by Futurus – The negotiations will fail

The title of this latest publication from Futurus may appear provocative but the prospect of concluding a jointly agreed leaving process and a future relationship so it can come into effect, possibly with a transition period, by March 2019 seems very remote.

There have been faults on both sides and the UK government’s failure to set out what exactly it wants the outcome to be has been a particular problem.

The UK government need not have agreed to the EU’s proposed sequence of events – the settlement of the Irish border issue and the exit fee – before discussing trading arrangements. Under Article 50, it need not have done so.

A mutually-agreed pause in the negotiations looks likely or else failure looks highly probable.

The full paper can be downloaded here. PLEASE NOTE: The paper has been revised since this article  was first published.

Leaving the EU – a Futurus briefing by Anthony Scholefield

Implementing the voters’ decision for Brexit is a huge task.  This paper analyses the way forward and recommends the most advantageous political and economic means of controlling the process.

The paper looks at the reasons why people voted to leave and summarises the debate since June 23rd. It considers how the concerns of business can be squared with a desire of many voters to restrict immigration from the EU.

The critical path out of the EU

This latest briefing from Futurus analyses the critical path to leave the EU. It concentrates on two areas. These are, winning a referendum and organising an effective and beneficial departure.

These require a clear aim and a clear plan, taking account of existing legal agreements and political realities.

(We normally display these articles in full on the CIB website, but due to the length of this piece, it needs to be accessed as an attachment)

 

 

The UK’s financial vulnerabilities as an EU member state

UK MEMBERSHIP OF THE EU.
TRADING ARRANGEMENTS ARE NOT SO IMPORTANT AS THE UK’S FINANCIAL WEAKNESS INCURRED BY EU MEMBERSHIP


We are often asked for the full presentation of all the financial aspects of the UK’s relationship with the EU and the EU referendum.

While trading arrangements are important,they have not been as decisive as balance sheet destabilisations throughout history.

This latest analysis by Futurus considers the diminution in UK assets because of its budgetary contributions and the UK’s increased liabilities and contingent liabilities due to EU membership.

Its conclusion points out that “While EEA states have no risk exposure to EU liabilities, the UK has enormous exposure. Moreover, it is, in part, one-sided with no corresponding EU risk exposure to the Bank of England. It is likely that further collapse in the finances of eurozone governments and banks will not attract open-ended EU entity support as in the period 2009-13 and resort will be made to bail-ins and haircuts on bondholders. However, prudent finance would be for the UK to leave the political and monetary structure of the EU and move to EEA status urgently.

To read the full report, click here