Labour is to challenge the Treasury with an urgent question in the House of Commons over how the government will account for the Brexit financial settlement.
UK and EU officials appear to have agreed on a formula for calculating Britain’s future liabilities to the EU after it leaves, which are expected to amount to more than £50bn over the coming decades and be presented by Theresa May in Brussels next week.
The Speaker, John Bercow, granted the former shadow chancellor Chris Leslie the right to ask an urgent question of Philip Hammond on Wednesday about how he will fund the payments. Liz Truss, the chief secretary to the Treasury, will answer on behalf of the chancellor.
In the budget last week, the Office for Budget Responsibility pencilled in net payments to the EU of £3.5bn a year until 2022-23, saying it did not have sufficient detail to make any other assumption.
No final figure will be mentioned in the agreement, which will cover how the UK’s share of future pension liabilities, and EU-backed debts, for example, will be calculated.
The Brexit divorce bill is expected to total between £53bn and £58bn (€60bn and €65bn).
The calculation is based on the UK's share of the EU’s unpaid bills, loans, pension and other liabilities accrued over 44 years of membership, as well as commitments made by the UK to the EU's seven-year budget cycle, ending in 2020.
This is estimated as a gross financial settlement of £89bn.
The sum is then reduced when payments that would have been made to EU projects in the UK, including structural funds, are taken into account, along with the UK’s capital share in the European Investment Bank.
The divorce bill will not be paid in a lump sum but over time, and the UK will continue to make some payments until all UK recipients of EU pensions have died.
Boris Johnson, the foreign secretary, appeared to support the fresh concessions on the divorce bill, telling Sky News he hoped it would lead to progress at a key summit of EU leaders next month.
“We’re working, as you can imagine, to build on the momentum we’ve got going forward to the December European council. We’re hoping very much that the offer that the prime minister is able to make at that council will be one that guarantees sufficient progress,” he said.
“I think that’s what everybody around the table, all the 27 plus us, really want to achieve. Now is the time get this show on the road. Let’s get the serious talks under way.”
Asked if this would be a breakthrough moment, Johnson replied: “I hope so.”
Other leading Cabinet Brexiters have signed up to the deal, with the transport secretary, Chris Grayling, saying the government would be “meeting the obligations we’ve built up, no more or less than that”.
Grayling, one of the ministers who resigned from David Cameron’s cabinet to join the Vote Leave campaign, said the sum of more than £50bn apparently agreed on Tuesday was speculation, but the government did not want to “walk away on bad terms”.
“I don’t think people in this country would expect us to just walk away from things we’ve already said we’d pay for,” he told BBC Radio 4’s Today programme.
Grayling said Britain’s net contribution to the EU budget was about £10bn a year.
A senior EU official told the Guardian on Tuesday night that the UK appeared ready to honour its share of unpaid bills, loans, pensions and other liabilities that could total between £53bn and £58bn.
“We have heard the UK wants to come along with the money,” the official said. “We have understood it covers the liabilities and what we consider the real commitments. But we have to see the fine print.”
The key sticking point before the summit, at which EU leaders will decide whether “sufficient progress” has been made on three key issues, is considered by both sides to be the Irish border rather than the financial settlement or citizens’ rights.
Grayling said neither side wanted to see a hard border between Ireland and Northern Ireland but a “sensible” trade deal with the EU would make the issue irrelevant.
“We have already said we absolutely do not want to return to a hard border, we see no reason to do so, we’ve put forward proposals as to how that can be avoided,” he said.
“But, of course, I hope that we’ll end up with a sensible free trade agreement, which means that becomes an irrelevant discussion. I don’t see any benefit at all to the United Kingdom or European Union to having barriers to trade.”
It is expected that the European commission will propose a joint statement for member states to scrutinise over the weekend before a series of meetings.
One senior diplomat told the Guardian: “The divorce bill should be fine now. That was the big issue. And then it wasn’t. The border is the big worry. And I don’t know how they can square that circle. That is the big one now and it is up to the Irish to decide.”
Reports on the extent of the financial settlement drew a muted response from some pro-leave MPs. Bernard Jenkin told the Guardian: “It better be worth it.” Others, such as Iain Duncan Smith and Jacob Rees-Mogg, have urged Theresa May to hold firm before offering too much.
The environment secretary, Michael Gove, one of the cabinet’s leading Brexiters, is said to be comfortable with the bill going beyond the earlier reported £40bn sum.
MPs from the remain side pointed to the cost of Brexit, as opposed to the leave campaign’s promises that more money would be coming back to the UK.
Responding to reports of the financial settlement, the Liberal Democrat leader, Sir Vince Cable, said: “If these numbers are correct, it means we’re paying a heavy price to leave an institution that has benefited the country for decades. The true cost of Brexit is becoming clearer by the day. This underlines why people should have a referendum on the final deal, with the option of an exit from Brexit.”
The Labour MP Chuka Umunna said: “Boris, Gove and other leave campaigners never said there would be a big divorce bill to pay, quite the opposite. This big new fact means the £350m extra per week for the NHS, without which leavers say they would have lost the referendum, simply will not happen.”
