Brexit divorce bill small change, but extra fees could make it higher: expert

LONDON, Nov. 29 (Xinhua) -- A 50-billion-euro Brexit divorce bill for Britain would be small change on a scale of public finance, a leading expert at the London School of Economics (LSE) said Wednesday.

Professor Iain Begg told Xinhua that a reported figure of around that amount would probably be acceptable to Brussels.

Begg said the agreed amount would come with several caveats, which would explain why both Britain and the EU were anxious not to discuss precise amounts of money.

The way the EU and it's activities are funded adds to the complications, he said, adding: "and this is when things become messy."

"Firstly there is the EU budget on current spending which includes projects agreed by Britain as an EU member. Some of the payments are not due to be made for some years," explained Begg.

Begg is a Professorial Research Fellow at the European Institute, London School of Economics and Political Science. His main research work is on the political economy of European integration and EU economic governance.

The professor believed that what needs to be agreed is when a line is drawn to show when Britain's commitments to projects will end. "There could be some ambiguity over this," he said.

Begg said that the EU budget program is seven years: 2014-20 -- with the implication that a UK leaving after the 1st quarter of 2019 would still be liable for the remaining seven quarters of that seven year program.

"I have put forward the argument that on a scale of public finance the sum being talked about is small change. We make a net contribution each year to the EU of around 10 billion euros, so it would equate to what we pay over five years. That is one way of looking at it," he added.

Begg said that the payment Britain agrees as its exit-fee will not be the end of the matter.

"There will possibly be continuing access to the European single market and other things Britain wishes to continue to be part of when it leaves the EU, such as research," he said. "Access to these things will be over and above the 50 billion euros requiring continuing payments. "

As an example, Begg said, Norway has access to the single market and pays about 900 million euros and Switzerland pays less on a pro-rata basis.

"With our population, depending on what we sign up to, it could be 8 to 10 times what Norway pays," the professor said. "Some of the Brexiteers may have something to say about that."

Following the recent budget by British Chancellor Philip Hammond, Begg has commented on the Brexit implications of Hammond's spending plans.

Begg said: "We also have to add in the cost -- probably spread over a number of years -- of the Brexit divorce bill which Ministers are grudgingly, if belatedly, conceding will have to be paid. The response to the demand from NHS head, Simon Stevens, for an extra £350 million a week may well, to coin a phrase, have to be 'go whistle'."

"But let's be clear: even without any direct effects of Brexit, the British economy is not in the best of health and has medium and longer term challenges to confront," he noted. "This is the message decision-makers should take from the budget and factor into the calculations of how to secure the best Brexit deal." Enditem