EXCLUSIVE: Bob Lyddon claimed that the £1trillion would sit on top of the UK’s existing £3trillion public sector net debt.
The Prime Minister, Andy Burham, has suggested the UK could rejoin the EU (Image: Getty)
Britain would be hit with an instant £1trillion bill in new liabilities if it rejoined the European Union in time for the bloc’s next long-term budget, a leading Brexit analyst has warned. Tax consultant and longstanding Brexiteer Bob Lyddon argued that becoming a co-guarantor once more of the debts of the European Union and the European Investment Bank would impose an “unnecessary penalty” on the UK.
The figure, equivalent to 34% of the size of the British economy, would land on day one of membership for the 2028-34 Multiannual Financial Framework, Mr Lyddon suggested. He outlined his detailed analysis in an op-ed published on the Lyddon Consulting website. He issued the warning as the Prime Minister, Andy Burnham, signalled he is prepared to “go all the way” and reverse Brexit.
The Labour leader told the BBC that full EU membership remains one of the options on the table alongside a customs union or single market deal, insisting the country cannot leave the question “hanging” after a decade of drift.
Mr Lyddon told the Express: “These added liabilities would amount to £1trillion if we rejoined the EU for the start of the EU’s 2028-34 budget period.
“From there the only way is up, as the EU plans to spend and borrow much more during 2028-34: on accession countries like Serbia and Moldavia, on Ukraine, on sustainable projects around the world, but with a diminishing portion being spent in net contributor EU member states like Germany – and the UK if Burnham has his way.”
His warning centres on a new EU funding mechanism known as “national and regional partnership plans”. These plans are set to reshape how money from the bloc’s budget is allocated, further weakening the link between what a member state pays in and what is spent back in its territory. Britain, as before, would be one of the two major net contributors rather than a net recipient. Under the new system, even less EU cash would flow back to the UK than in the past.
Nigel Farage says second Brexit referendum will divide Britain
Mr Lyddon stressed that the £1trillion would sit on top of the UK’s existing £3trillion public sector net debt. It forms part of a growing stock of “shadow” liabilities — guarantees, future spending commitments and contingent risks that do not appear in the headline national debt figures but ultimately fall on businesses and taxpayers.
The EU’s plans for 2028-34 already point to higher spending and borrowing. Accession countries, support for Ukraine and global green projects will take a larger share, while traditional net payers such as Germany and, potentially, a rejoined Britain would shoulder more of the burden with less return.
Mr Lyddon added: “This is the upshot of a new concept being introduced for the 2028-34 Multiannual Financial Framework called ‘national and regional partnership plans’.
“This is a new way of allocating funds from the EU Budget and one that is likely to further reduce the correlation between how much money a member state pays in, and what EU funds are spent in it.
“The UK, as before, would be one of the two major EU economies who would pay into the EU on net basis, rather than receiving. Under ‘national and regional partnership plans’ we will get even less EU money spent here than was the case before.
“It is all downside, and at a time when the UK is already skirting on the edge of bankruptcy.”
Mr Burnham’s comments at the Labour conference and in subsequent interviews have reopened the Brexit wars. French President Emmanuel Macron responded with a public “Welcome back,” while Spanish Prime Minister Pedro Sanchez said Spain would open its arms. Opposition figures and Brexiteers have accused the Prime Minister of preparing a full reversal of the 2016 referendum result.
Mr Lyddon’s analysis lands as the Government expands its own “shadow” liabilities through infrastructure, industrial and clean energy strategies. He argued the combination of domestic shadow debt and a return to EU co-guarantor status would create a “monstrous” total burden on British businesses and individuals.
Mr Lyddon, who has tracked EU finances for years and previously calculated that Brexit spared the UK from hundreds of billions in earlier shadow debts, said the £1trillion exposure would arise mainly from joint and several liability for EU borrowing and European Investment Bank obligations. Membership would also lock the UK into rising cash contributions as a large net payer, he suggested.
Mr Burnham has insisted any decision on the long-term relationship with Europe will be based on what is “doable” and where consensus can be found, with options due to be set out around a UK-EU summit later this year.