Britain will still be paying a £37.1 billion Brexit bill to the European Union in 2064, almost half a century after it leaves, according to its independent fiscal watchdog. The Office for Budget Responsibility (OBR) said that, although most of the bill would be paid by 2024, pension obligations would last for decades.
The figures came in documents accompanying chancellor of the exchequer Philip Hammond’s Spring Statement to MPs on Tuesday. In the statement, which included no new tax or spending commitments, Mr Hammond said Britain’s economy will grow a little faster than expected this year and that borrowing will fall. But growth will slow next year to 1.3 per cent and remain at or below 1.5 per cent until 2022.
Yet to clarify
The OBR said it was impossible to quantify the impact of Brexit on the country’s public finances, partly because Theresa May had yet to clarify what she wants from negotiations with the EU.
“One of the more direct and readily quantifiable ways that Brexit will affect the public finances is by reducing or stopping the UK’s contributions to the EU budget. But, soon after the referendum, the chancellor guaranteed funding for certain EU projects after the UK leaves the EU (eg in agriculture, science and structural fund projects), subject to various conditions. And the prime minister has subsequently stated that the UK may continue to make contributions where it wishes to participate in some European programmes. The government has not yet fully articulated its intentions in this area and, even if it had, the precise post-Brexit outcome remains subject to negotiation,” it said.
Upbeat
Despite his forecast that Britain will grow more slowly than most major industrialised nations, Mr Hammond said he was upbeat about the economy, accusing Labour of spreading doom and gloom.
“There is indeed light at the end of the tunnel ... but we’ve got to make absolutely sure it isn’t the shadow chancellor’s train hurtling out of control in the other direction towards Labour’s next economic train wreck,” he said.
Labour’s shadow chancellor John McDonnell accused Mr Hammond of complacency and of ignoring the crisis in Britain’s public services. He said the government had cut taxes for the rich and made the most vulnerable pay through poorer public services.
“Today we have the indefensible spectacle of a chancellor congratulating himself on marginally improved economic forecasts, while refusing to lift a finger as councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled, and wages are falling. This isn’t a government that’s preparing our country for the future. It’s a government setting us up to fail,” he said.
