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European Union Finances: Annual Statement

Volume 699: debated on Thursday 15 July 2021

I have today laid before Parliament the “European Union Finances 2020: statement on the 2020 EU Budget and measures to counter fraud and financial mismanagement” (CP472). This is an annual publication and is the 40th in the series. This edition of the statement is the last in this publication series that will cover the period of the UK’s membership of the EU (which lasted until 31 January 2020) and also covers the 11-month transition period that ended on 31 December 2020.

This year, annex E of the statement provides additional detail on the assurance arrangements that HM Treasury has introduced in relation to the financial settlement under the withdrawal agreement, and which were reflected in domestic law in the European Union (Withdrawal Agreement) Act 2020. HM Treasury has worked with the European Commission and its implementing partners to ensure their systems and controls over financial reporting are suitable for the specific requirements of the withdrawal agreement.

The first invoice under the financial settlement was received in April 2021 in relation to payments to be made in the period June to September 2021. The net UK liability under the first invoice was €3.74 billion and the first of four equal monthly instalments was paid at the end of June. A second invoice, covering payments due in the period from October 2021 to April 2022, is due in September.

The document also provides an updated HM Treasury estimate of the total value of the financial settlement. HM Treasury estimate that the current value of the financial settlement is £37.3 billion. This remains within the Government’s previously published reasonable central range, adjusted to take into account the UK’s 31 January 2020 exit date. In annex E, HM Treasury provides an updated summary of the financial settlement, other costs set out in the withdrawal agreement and short-term public expenditure costs.

The 2020 statement also includes a new annex F on UK participation in EU programmes under the trade and co-operation agreement. This sets out an update on the EU programmes the UK is set to associate with later this year.