Warning over EU claims on pensions
The EU is attempting to overcharge Britain for its share of the Eurocrats pension fund by billions, a leading academic has warned.
Professor John Clancy, a visiting professor with the Centre for Brexit Studies at Birmingham City University, has raised concerns over how the EU Commission calculates the final divorce bill.
He said pension liabilities for Euro civil servants – which Britain has agreed to pay a share of – had now reached €73 billion, making it one of the biggest items on the Brexit settlement.
The former leader of Birmingham City Council said the EU had 'unjustifiably used' a discount rate for the 2017 accounts which had 'rapidly inflated' the pension liability figure by €6bn over a year.
Britain is thought to be facing a pensions bill of more than €11bn next March, a figure which experts have argued should be less than €4bn.
Prof Clancy, who voted Remain in the EU referendum but has since described Brexit as 'an opportunity', said: “The liabilities included in the accounts for the EU’s civil service Pension Fund have just hit €73 billion.
“The problem is that the UK, on leaving next March, has to commit to pay – one way or another – its share of that huge figure and it is one the biggest items on the Brexit bill.
“The UK needs now to ask some tough questions of the EU Commission about their figures – questions which, to be frank, the Treasury and our negotiators should have been asking a long time ago."
Prof Clancy, who is a councillor for Quinton, added: “It’s gone up €10 billion since 2015 and over €6 billion just since the last accounts.
“Surely this isn’t the EU Commission or its negotiators pulling a fast one?”
“I’m not being anti-EU here, as the methods they use are not untypical of those who calculate pension liabilities within the UK, for example, local authorities or in higher education, but we need to get to grips with this artificial problem, and soon.
“Due to wider European Central Bank policy, the real discount rate they’ve unjustifiably used for the 2017 accounts has suddenly and rapidly inflated the pension liability figure – it might work for an accounting exercise, but it’s not a tenable figure for our negotiations.”
Professor Alex de Ruyter, director of the Centre for Brexit Studies, said: “These are very challenging findings – but I think they could be hugely significant in terms of negotiations with the EU – and indeed for the other 27 EU countries in terms of their own financial contribution."
