One of the biggest selling points for Britain leaving the European Union was that the UK would be able to stop £350 million ($429 million) a week in gross weekly contributions to the 28-nation bloc.
The Vote Leave campaign touted this benefit widely, saying the money could instead be used for public services, like the NHS.
However, according to a number of UK officials cited by the BBC, Britain faces paying billions of euros annually to the EU, even after it leaves the EU and even if the UK opts for a “Hard Brexit” — B leaving the European Union without access to the Single Market.
A number of officials in government believe the UK will have to make these payments to stay part of the EU Single Market, according to the BBC programme Newsnight. This is not anything new. If the UK wants to be like Norway and be outside the EU but still have Single Market access, it will have to adhere to EU immigration rules and make payments to the EU.
However, what is interesting is that officials say Britain could be making payments to the EU, even after it officially leaves the bloc for a variety of other reasons, including the suggestiong that the UK could try to push for “pay-as-you-go” access to the Single Market:
Kwasi Kwarteng, the Conservative MP for Spelthorne, told the BBC: “It may well be the case that we have to contribute, I think, for a transition period to stabilise their budget for three to five years. But the point is that at the end of that five years we can say ‘No, we don’t want to put a penny more into your kitty.'”
To fall back immediately on WTO (World Trade Organisation) rules would risk an economic shock and certainly an economic downturn
Andrew Tyrie, the Conservative chairman of the influential House of Commons Treasury Select Committee also added that making payments to the EU is likely to happen because the UK desperately needs access to the Single Market: “We want a high degree of access to the single market, in my view. To fall back immediately on WTO (World Trade Organisation) rules would risk an economic shock and certainly an economic downturn given the high degree of trade integration at the moment between Britain and the EU.”
An unnamed senior Whitehall official said that Britain would need to secure preferential trading terms by making at least a one-off bulk payment to the EU.
When Prime Minister Theresa May triggers Article 50, starting the two-year negotiation period for the UK’s exit of the European Union, all eyes will be on negotiations to see what type of deal Britain gets.
It looks like Britain is careening head-first into a “hard Brexit,” which would see it restrict freedom of movement but lose Single Market access. The Conservative-led government is prioritising immigration in the nation’s Brexit deal.
EU Commission President Jean Claude-Juncker and the EU Parliament’s chief Brexit negotiator Guy Verhofstadt have both said Britain will not be allowed to retain access to the single market
and pull out of the free movement of people.
But Britain needs the Single Market. Britain’s government predicts that a “Hard Brexit” will cost the UK £66 billion a year in lost tax revenues.
According to “leaked government papers” seen by The Times newspaper, the UK Treasury is warning cabinet ministers that the country’s GDP could fall as much as 9.5% if it lost access to the Single Market, because Britain would have to rely on the World Trade Organisation rules for trading and therefore miss out on more favourable trading tariffs that come with being a member of the 28-nation bloc.
So it is not out of this world to think that Britain may try to keep us in the Single Market a little longer — almost like a Pay-as-you-go basis — but considering PM May said she will not give a “running commentary” on what the government is negotiating, we will have to wait and see what happens when she triggers Article 50.