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UK Officials Have Privately Told Senior Bankers The Brexit Divorce Bill Will Be Close To £50 Billion

Theresa May's government has so far publicly refused to say how much it's willing to pay to secure a trade deal when it leaves the EU.

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Britain’s final “divorce” bill for leaving the European Union could be as high as £50 billion, several current and former senior government officials have told City executives.

BuzzFeed News has learned of at least three separate recent occasions on which Whitehall insiders with knowledge of the Brexit negotiations told contacts in the banking sector that the UK will have to pay close to that amount, giving private assessments of the divorce bill that were different to the government’s public position.

One of the estimates was included in a confidential memo for top corporate executives compiled by well-connected former government officials, including some who worked at a high level in 10 Downing Street. The memo, seen by BuzzFeed News, claims that senior figures in the government believe a payment of around £50 billion will be necessary to secure a trade deal with the EU before Britain leaves in March 2019.

That figure does not reflect the views of Theresa May or her closest advisers, a spokesman for Downing Street said.

The document was shared with BuzzFeed News on the condition that its authors were not identified.

BuzzFeed News is aware of two other, unconnected recent conversations in which officials from the Department for Exiting the EU (DExEU) and the Treasury gave similar estimates of the likely exit bill to senior executives at leading financial services firms. Those executives regarded the assessments as authoritative, even though the officials were giving accounts at variance with official government policy.

Separately, a Treasury official told BuzzFeed News the divorce bill would be around £45 billion.

And a former government employee with knowledge of the Brexit discussions said that “everybody sensible” in Whitehall believes the UK will end up paying a sum “in the tens of billions” to settle its obligations to the EU when it leaves.

The UK’s official position is that it will abide by its legal obligations to the EU, but that any financial settlement will be determined in the negotiations. The government has refused to comment on the size of the UK’s liabilities, or to say whether there will be a net payment when Britain leaves the union.

The exit bill is one of the first issues the UK and the EU have to resolve in the formal Brexit talks that began last month. Analysts have calculated that Britain’s financial commitments — which include yet-to-be-paid contributions to the EU’s budget, its share of projects that are due to be initiated after 2019, and longer-term obligations such as pensions and loan guarantees — could be as high as £75 billion, although estimates have varied widely and some experts say Britain legally doesn’t owe anything.

It is one of the most controversial points in the negotiations and highly politically risky for May.

Eurosceptics in the Conservative party, including in the cabinet, have publicly rubbished the idea that Britain owes anything to Brussels when it leaves the EU. Some have urged May to walk away from the negotiations if the EU asks for too much. Earlier this month, foreign secretary Boris Johnson said the union can “go whistle” if it expects Britain to pay the vast sums that have been floated.

A payment of tens of billions of pounds would be perceived as a significant concession to Brussels and could provoke a backlash from within the cabinet and the Tory back benches, one of the government sources said.

It would also be deeply unpopular with many voters, particularly among those who backed Brexit thinking large amounts of money would flow back to the UK after it left. It could be politically dangerous for May if she is seen as handing out billions to Brussels at the same time she is resisting calls to spend more on public services domestically.

However, Leavers on the Conservative benches may be softening their position on the divorce bill. Several Tories have said recently that they accept there will be a substantial exit payment and will not oppose it as long as it remains clear that May intends to take Britain out of the EU, according to a well-connected Westminster source who has discussed the matter with several MPs.

The EU, which set out its formal position at the end of May, insists that Britain will have to resolve the exit bill in the first stage of the Brexit negotiations. It wants to agree a method for calculating Britain’s financial dues before moving on to discussing other matters, including transitional arrangements and the comprehensive free trade deal May wants to underpin the UK’s future relationship with the union.

The UK has yet to spell out its position on the financial settlement in detail despite warnings from the EU’s chief negotiator, Michel Barnier, that failure to do so will halt the talks.

In public statements, the UK government has recognised that it has financial commitments to the EU that will extend beyond March 2019, but it has refused to say how much it believes the UK owes or how much it is willing to pay. At a press conference in Brussels last week, Brexit minister David Davis refused to say whether there would be any net flow of funds from the UK to the EU when Britain departs.

A government spokesman told BuzzFeed News: “We have been clear that when we leave the EU, the days of Britain paying vast sums of money into the EU every year will end. But as the prime minister said in her letter to [Donald Tusk, president of the European Council, when she triggered Article 50 in March], we recognise we will need to discuss how we determine a fair settlement of the UK’s rights and obligations as a departing member state.”

At this stage, instead of giving a figure for the UK’s financial commitments ministers prefer to let Europe set out its rationale for the divorce bill and then chip away at that in the negotiations, according to people with knowledge of the government’s thinking on Brexit.

Davis told the House of Lords’ EU select committee this month: “It is fairly obvious that the objective in the case of the financial settlement is not to pay more than we need to, but there will be a process of challenge, which has already started in the negotiating process, to establish whether we believe in that particular case that the Commission has made a legally defensible argument.”

British officials have been going through the EU’s proposals “line by line, almost word by word, to see exactly how much we think it stands up,” Davis added.

Behind the scenes, senior figures in Whitehall have been telling contacts in the City that a huge payment by the UK is inevitable, regardless of what ministers have been saying in public.

In their assessment, May doesn’t have a choice if she wants to get an acceptable Brexit deal in the short amount of time left. Compromises will have to be made if Britain is to avoid crashing out with no new agreement, and money is May’s strongest bargaining chip, they said.

Ultimately, the UK wants to secure a comprehensive free trade agreement with the EU. Ministers now accept there will have to be a period of transition in which some elements of the status quo would be maintained beyond March 2019, to give businesses time to plan for the new arrangements. The EU insists that Britain would have to keep playing by all its rules during an interim phase, including contributing to its budget. Britain’s current annual net contribution stands at £8.7 billion.

The European Commission says it won’t discuss any of this until the initial terms of withdrawal, including the divorce bill, have been resolved. That gives May an incentive to agree the exit payments early in the negotiations, Whitehall insiders said.

Alex Spence is a senior political correspondent for BuzzFeed News and is based in London.

Contact Alex Spence at

Alberto Nardelli is Europe editor for BuzzFeed News and is based in London.

Contact Alberto Nardelli at

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