IEA launch new Brexit Unit & argue that EU divorce bill should not exceed £26bn
IEA launches Brexit Unit & new paper on EU divorce bill
The IEA is delighted to announce the launch of its new Brexit Unit – set up to ensure that a strong, free market voice is heard clearly as the UK prepares to leave the European Union.
Brexit provides a golden opportunity to create a more flexible, open and vibrant economy and to champion, by example, the benefits of free trade around the world. But a positive outcome is not guaranteed. Negotiations are ongoing and a ‘good deal’ is far from certain; Brexit could end up resulting in more bureaucracy and state intervention, rather than less.
Led by the IEA’s Chief Economist Julian Jessop, the Brexit Unit will make the intellectual case for free markets in the many debates that lie ahead. This will include discussions of the exit terms and the nature of our future relationship with Europe and the rest of the world.
Should the UK pay an EU divorce bill?
Alongside its launch, the Brexit Unit has published its first briefing on the Brexit divorce bill, which argues that the upper limit of this bill should be no more than £26 billion. This figure has been reached based on the following principles:
The EU has made long-term financial commitments during the period of the UK’s membership agreed by the UK and on the assumption that the UK would continue to contribute.
- The EU operates a budget process called the Multiannual Financial Framework and there is therefore a case for arguing that the UK should continue to make its usual payments until the end of the current MMF (which runs from 2014-2020).
- This would imply a divorce bill of around £21 billion (net of the UK’s rebate and EU spending in the UK) covering from March 2019 to the end of 2020.
- There could also be a smaller one-off items on top of this – for example pension payments contributions – which could take the bill to around £26 billion.
Commenting on the briefing, author Julian Jessop Chief Economist at the Institute of Economic Affairs said:
“The Brexit negotiations will need to decide how much the UK will pay the EU to settle financial obligations undertaken while it was a member. Many Brits would suggest that the right figure is in the ballpark of ‘zero’. However, some EU officials have suggested that the bill should be north of €100bn. A compromise towards the lower end of this range might be acceptable – a figure of around £26 billion could be justified using certain principles. But if the two sides fail to agree a good deal on the terms of any future relationship, the UK can, and should, walk away without paying a penny.”
Commenting on the launch of the Brexit Unit, Julian Jessop Chief Economist at the Institute of Economic Affairs said:
“The negotiations over the terms of the UK’s departure from the EU have only just begun and there is still a lot to play for. The IEA’s new Brexit Unit will make positive and constructive contributions – with an emphasis on free market solutions. I am delighted to have the chance to lead this work at such a crucial time.”
Notes to editors:
The IEA’s Brexit Unit was launched last night at a reception held at Institute of Economic Affairs’ offices: 2 Lord North Street, London, SW1P 3LB, with a keynote speech from Gerard Lyons, former Chief Economic Adviser to Boris Johnson.
For media enquiries please contact Stephanie Lis, Director of Communications: email@example.com or 07766 221 268 or Nerissa Chesterfield, Communications Officer: firstname.lastname@example.org or 07791 390268
To download a copy of the Brexit Unit’s first briefing, ‘Should the UK pay an EU divorce bill?’ please click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.
The IEA is a registered educational charity and independent of all political parties.
Latest News from
Civitas - Study finds over 80% CofE dioceses appoint clergy who advocate racial justice activist claims & over 70% promoting climate activism – marking Church’s ‘separation of the head from the body’10/06/2021 11:35:00
In a new report, researchers have set out to investigate the scale of support for ultra-progressive radical activist agendas alleging ‘systemic racism’ in English society, the understanding and use of ‘unconscious biases’ and prescribing a ‘climate emergency’ doctrine within the Church of England.
‘Special relationship’ can thrive if UK forges new green trade agenda with US at G7 summit – IPPR report10/06/2021 10:35:00
Ahead of the G7 leaders’ summit in Cornwall, the IPPR think tank is urging the UK to spearhead efforts to rewrite the rules of global trade.
IEA - “Social distancing rules must go on 21st June”: IEA expert responds to ONS data on UK pubs and bars sector10/06/2021 09:35:00
Christopher Snowdon, Head of Lifestyle Economics at free market think tank the Institute of Economic Affairs, responded to figures from the Office for National Statistics showing that 55 per cent of pub staff are still furloughed and only 24 per cent of pub owners have “high confidence” that their business will survive the next three months
‘Bitter irony’ that health and care staff are made ill by their work: The King’s Fund response to the Commons Committee report on workforce burnout and resilience08/06/2021 11:35:00
Suzie Bailey, Director of Leadership and Organisational Development at The King’s Fund, responded to the Health and Social Care Committee report on workforce burnout and resilience in the NHS and social care
Adam Smith Inst - Aussies & Brits tell Govts: Get trade deal done08/06/2021 10:35:00
A new poll from the free market think tank the Adam Smith Institute (ASI) and research and strategy firm at C|T Group RSR has found Brits and Australians want to expand trade and secure a comprehensive deal.
G7 Tax Agreement: IPPR says countries can still go further to end ‘race to the bottom’ on tax08/06/2021 09:35:00
IPPR - New developments must prioritise environmental and community needs, say locals on Thurrock climate jury04/06/2021 15:10:00
Local people should have more meaningful ways to shape planning and development decisions to ensure environmental and community needs are met, according to 20 Thurrock residents participating in an innovative climate citizens’ jury.
IFS - Socioeconomic inequalities in mortality were growing for adults pre-pandemic, but falling for young children04/06/2021 14:10:00
Inequalities in mortality rates by socioeconomic position had been rising in England prior to the pandemic, both for men and women.
IEA - Advertising regulation a “threat” we cannot ignore, says new research02/06/2021 14:15:00
New research from the Institute of Economic Affairs warns we have sleepwalked into wide-ranging restrictions on advertising – and that it may not be long before there is pressure to ban certain types of expression and imagery in the arts, entertainment and politics.