Brexit: Downing Street rejects EU's estimate of divorce bill

Downing St has rejected the EU's estimate of the UK's post-Brexit divorce bill after new figures put the total debt at £40.8bn.

The sum was published in the EU's accounts for 2020, which also state that the UK should pay the EU £5.8bn this year.

No 10 insisted the bill - which covers spending commitments made before the UK left the EU - stands between £35-39bn.

It said the EU estimate did not reflect "all the money owed back to the UK".

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A European Commission spokesman insisted the new figure is "correct" adding: "We have already informed the UK government about the payments that they have to do with regard to the first part of this year and they've already in fact paid part of the amount concerned.

"Therefore, we have absolutely no indications at this point in time that the bill, or the amount that we've calculated will be contested."

However, responding to the higher estimate a Downing Street spokesperson said: "We don't recognise that figure, it's an estimate produced by the EU for its own internal accounting purposes.

"For example it doesn't reflect all the money owed back to the UK which reduces the amount we pay.

"Our estimate remains in the central range of between £35-39bn and we will publish full details in Parliament shortly."

During Brexit negotiations, the UK agreed to pay the EU a sum of money which covered pension contributions for EU staff as well as funding for three EU research programmes from 2021-27.

However, as part of the settlement, the EU will also pay back money the UK put into the European Investment Bank (just over £3bn) and the European Central Bank (about £50m).

The UK will also receive a share of any money paid to the EU in fines that were imposed before the end of 2020, which is estimated to be worth about £1.2bn.

Cast your mind back a couple of years and it wasn't Covid dominating the headlines, but wrangling over Brexit.

Early on in the negotiations, when the UK was trying to agree the terms of its departure with the EU, there were sticking points - and the so-called divorce bill was one of them.

Reports emerged of various sums the UK might have to pay, with higher estimates prompting the then Foreign Secretary Boris Johnson to famously say the EU could "go whistle".

Needless to say the financial settlement remained a point of tension for some time, before both sides agreed a way to work out how much would be paid.

Now though, disagreement is bubbling again over the final figure, with the EU and UK suggesting different amounts.

It seems there could be another Brexit-related row brewing.

The cost of the divorce bill caused significant tension during Brexit talks, with suggestions the final figure could reach as high as £100bn.

The financial deal - which included a method for calculating the payments rather than an actual figure - was agreed in November 2018 by then Prime Minister Theresa May as part of the withdrawal agreement.

Her successor Boris Johnson sought to renegotiate parts of the agreement but did not change the financial aspect, although at one point he did suggest withholding the money and using it as a bargaining chip in future negotiations with the EU.

The withdrawal agreement - along with the financial settlement - became law in January 2020.