Brexit: EU expects Boris Johnson to pay £39bn divorce bill even in event of no deal

Prime minister believes a no-deal scenario would free ‘very substantial sums’ to spend on domestic priorities

Andrew Woodcock
Political Editor
Monday 26 August 2019 12:06
European Commission spokeswoman on Brexit divorce bill

Britain will be expected to pay its £39bn Brexit divorce bill in full even if it leaves the EU without a withdrawal agreement, Brussels has said.

A European Commission spokesperson indicated that failure to pay could hamper the UK’s chances of negotiating a free-trade agreement with the remaining 27 nations after withdrawal, stating that the financial settlement was “essential” to getting the new relationship onto a good footing.

Prime minister Boris Johnson claimed on Sunday that “very substantial sums” could be redirected to domestic priorities if the UK left without a deal, amid reports that he had received legal advice suggesting that the payment could be cut to as little as £7bn.

But he did not mention the settlement in a meeting with European Council president Donald Tusk at the G7 summit in France, and the commission spokesperson said that London has not formally raised the issue with the EU so far.

“All commitments that were taken by the 28 member states should be honoured,” said commission spokesperson Mina Andreeva in Brussels.

“This is also and especially true in a no-deal scenario where the United Kingdom would be expected to continue to honour all commitments made during EU membership.

“Settling accounts is essential to starting of a new relationship on the right foot, based on mutual trust,” she said, adding that London has not formally raised the issue with the EU side so far.

European Parliament Brexit coordinator Guy Verhofstadt said: “If the UK doesn’t pay what is due, the EU will not negotiate a trade deal. After a ‘no deal’, this will be a first condition of any talks. Britain is better than this.”

And the former head of the European Commission’s legal service, Jean-Claude Piris, tweeted: “If the UK refuses to pay its debts to the EU, then the EU will not accept to negotiate a trade agreement with the UK.”

The financial settlement agreed by Mr Johnson’s predecessor Theresa May covers outstanding payments for commitments made by the UK as an EU member, as well as future liabilities such as pensions for EU staff employed during UK membership. It also includes membership dues for the two-year transition period ending in December 2020 negotiated by Ms May, which will not take place in a no-deal scenario.

The UK has estimated total liabilities, to be settled over a period of many years, at up to £39 billion, though this figure is certain to have changed because of the failure to leave on the expected date of 29 March. No exact sum has ever been confirmed by Brussels.

Opponents of no deal predict that if the UK leaves without an agreement, it will immediately find itself faced with exactly the same demands from Brussels on a financial settlement, citizens’ rights and an Irish border backstop when it enters negotiations on future trade arrangements.

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Meanwhile, the government played down suggestions that Mr Johnson could seek a short extension to the 31 October date for Brexit if a deal is struck at the last minute, to allow parliament time to legislate for its implementation.

“He’s not going to do that,” said a senior British official. “If we have agreed a deal after all this time, then I think the country would expect parliament to be able to find a way to pass the necessary legislation to allow us to leave the EU on time on 31 October.”

Asked if this could mean MPs working through the nights and weekends to rush through ratification of the deal, the official replied simply: “I think the public would expect parliament to find a way to get this done.”

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