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.

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  1. Adam HileyReply

    lets not give these crooks any more of this Nations a single penny or £ more leave get rid of the corrupt 3 old parties leave the EU & ECHR now

  2. StevenReply

    I say we should give them what we legally owe ie contributions to pensions and EU projects we were committed to BUT NOT A SINGLE PENNY MORE. Such is their totally obstructive attitude towards us (how DARE we pesky Britons leave their wonderful club?) if they don’t stop this I would begrudge even paying that!

  3. Ken WorthyReply

    The EU’s demand for a contribution towards generous future pensions for EU civil servants seems to be taken for granted. Yet it is as spurious as the rest of their claim. There is no EU pension fund, and no EU member pays into one to fund future pensions. The EU pays its pensions in the same way as we do, on the “pay as you go” principle. Today’s payments pay for the pensions being paid out today. When we joined, we started paying our share of the pensions of those who had retired before we joined. We’ve paid our share and should not pay any more.

  4. Phil JonesReply

    Good points, Ken. Why should we pay for the pensions of Brits who are working for EU organizations? Their pension benefits were built up while the UK was in the EU and after Brexit their pensions will be earned while they work for the EU sans the UK. No UK liability for their future lavist overpaid EU pensions that I can see.

  5. Ian PhillipsReply

    The government must stop being held to ransom and take the game back to the EU, pronto.
    They must announce that because of the disingenuous game-playing ….’money wanted just to speak’ etc, the EU is considered to have effectively ceased negotiating. Any existing exit payment pledge, e.g. the current £20Bn, is withdrawn.
    Recent history demonstrates that the aim of the EU is constantly to stall progress in the ‘negotiations. I believe their aim is to try to force a last minute crisis in 2019, for which the remedy is ‘more time needed’. If this situation is allowed to continue, our exit will therefore be postponed ‘to allow discussions to proceed’, alongside increasing demands for money, etc. Result: our EU membership simply continues. We are no further forward.
    The EU already trades with many nations within the WTO system, whose rules prevent tariffs being deliberately exaggerated to suit political circumstances. They would be obliged to trade fairly with us, in the same way, as a 3rd party country. We need to be committed to this decision and rapidly divert resources to setting it up.
    The period immediately after March 2019 is not now to be a ‘transitional period’, but a clean and total break from the EU….our borders back, no EU laws, ECJ or further membership contributions. Trading to be within WTO rules until further notice.
    Meanwhile, if the EU wishes to get real and enter into sensible ‘adult’ negotiations with the serious aim of reaching a better trading agreement later, then we would welcome this. If and when such an agreement is reached, the WTO period can be superceded.
    Along the way, the question of balancing out financial matters between us and the EU can be discussed and hopefully agreed.
    I believe a firm decision to take this path, and stick to it, would restore confidence in the government and demonstrate that the exit referendum decision is being unconditionally upheld.

  6. Jeremy WraithReply

    Ken Worthy’s point that pensions are paid on “the pay as you go”principle is very apt. Are you all aware of the huge future cost of EU pensions for the next generation? It has been estimated by the University of Freiberg in a report commissioned by the ECB in 2009 that the pensions liability of just 17 EU countries amounted to a staggering 30 trillion euros. The report concluded that the UK had the lowest liability at 91.2% GDP. France, Germany and Austria had pension liabilities of over 300% GDP. Leaving the EU has surely saved our next generation from a lifetime of debt helping to fund this colossal liability.

    With regard to the EU bribing the UK for more and more money before they even begin to talk about trade is Obscene in the extreme. Since 1973 UK trade with the EU has currently resulted in a deficit of well over £1 trillion. Yet the UK made a surplus in trade with the rest of the world over the same period of over £200 billion.

    • StevenReply

      Germany looks like it is going to have to have another general election. It looks like ‘weak and wobbly’ governance is not just the forte of the British CONServative Party and Mrs Maybe though they at least they have a good excuse in that their electoral system is laudably highly democratic unlike ours. ‘Negociations’ with the EU over our supposed exit will be delayed yet again whilst Germany attempts to get itself a workable government. Proof, if any were needed, that it is Germany that really runs the EU. I wouldn’t be at all surprised if we AS WELL have another election by March or so since the divisions inside the cabinet run so very deep.

    • Adam HileyReply

      Germany is a Country I have always admired and respected Britain should be run like Germany at least the Trains run on time under Hitler & Merkel

      • StevenReply

        I admire Germany too to a large extent along with Japan and South Korea (the latter two for controlling immigration properly and having vibrant, export-driven economies which just goes to show the nonsense spouted by Tory and Labour that Britain can’t have a good economy without mass and continual immigration is utter rubbish). I certainly approve of their electoral system: which although it ISN’T faultless (there is no such thing as a perfect electoral system as all of them have various plus and minus points/trade-offs between various factors) it is certainly a good basis for a system. About the only thing I can find fault with it for is with the ‘closed list’ aspect which could be made into an ‘open’ regional list instead.

  7. Gordon WebsterReply

    I am basically a simple soul. As far as I see it, the EU is no more than an Unincorporated Association – a Club – which we are leaving. The only legal validity they have, or ever had, was via the European Acts in the British Parliament. When the Act as repealed, we are no longer members of the club and by normal rules, all assets and liabilities are the property of the remaining members.
    If, however, the EU demands that we take a share of the Liabilities then we must, ipso facto, claim a share of the assets, plus the monies owed to us. An article in the Mail, by Leo McKinstry, put that at £58 billion. He put together the money we have in the ECB, illegal bailouts to Eurozone Countries, monies not paid to us for the Health Care of immigrants and tourists from Europe, and so on.
    The European Commission may believe that, as Barosso and Juncker have both said, that “the EU Treaties mean what we say they mean,” but they are very, very wrong. They cannot have their cake an eat it. We owe, and share in the asset, or we walk away from the club owing nothing.

    • StevenReply

      Very wellsaid. I agree with you totally. I was being a bit too generous to the EU earlier. I think an exit bill of LESS than £20 billion and preferably less than £15 billion could be acceptable but certainly not any figure North of that or in the many tens of billions! Of course, they are very annoyed we voted to leave and it is understandable from their point-of-view having previously thought we were committed to the project and the entire future plans for it from 1973 onwards but in reality the vast majority of the ordinary British people didn’t want this vision and it was ONLY the British political Establishment that did. They need to understand that Britain has a very much more undemocratic voting system than the majority of them do so this has helped to build that gulf in opinion between the electorate and our politicians which only came to a head in a very rare national referendum (a less than ideal way of measuring public opinion at the best of times). They should understand, therefore, it is wrong to seek to punish normal people for the non-consensual approach to the issue displayed by successive governments since the early 1970’s.

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