This new Brexit bill is bonkers. The United Kingdom is being pressed to give more and more money away by the EU and other EU member states. It should resist – and spend its money on preparing for Britain’s future post-Brexit.
Ever since Theresa May’s Florence Speech, the question of how much the UK will give to the European Union, just to start trade negotiations, has dominated the headlines. We read today that a payment of up to £55 billion has been agreed – £35 billion more than what was previously thought to be on the cards.
The real reason for this more-than-doubling of the ‘Brexit Bill’ is unknown. However, speculation has it that the UK is conceding to the EU that its obligations are double its commitments to the Multiannual Financial Framework, and include the UK’s share of the reste à liquider – the unpaid balance of the EU’s budget commitments.
This rationale is, however, bogus. Article 50 expressly states that the EU treaties will cease to apply to the UK upon withdrawal. As such, under what legal basis a claim against the UK for future unaccrued spending commitments can be made is unclear. Further, as Note Five to the EU Accounts shows, a budgetary commitment is in principle made before the related legal commitment. As not all of the reste à liquider is legally committed by the EU, if it is unaffordable post Brexit, it should not come crying to the UK for more money.
Other theories as to why the UK needs to be offering more taxpayer money to the EU range from covering costs of transition for the EU to satisfying the costs of the UK remaining in certain EU agencies and / or projects. We have, as outlined by David Davis some months ago, already agreed with Barnier’s team that the UK will remain in the European Health Insurance Card scheme, and I’m sure that the Government will wish to remain in more to come. But pledging money upfront for these schemes is one thing, pledging money to just open up trade talks is another.
Let me be clear: if there is a £55 billion payment to the EU to start talks on trade, it would be an outrage. There is no legal basis for such demands, and the UK is far better off spending such sums on preparing for life outside the EU. It would also be outrageous because the UK would be giving in to demands that are quite clearly unwarranted from both the EU and other member states.
These claims seem to be coming from the EU in wanting to cover its budget but also from governments in Eastern Europe that want to be sure of their subsidies for years to come. Indeed, the whole increase in the ‘Brexit Bill’ seems to be a bribe to those nations that argue they will be adversely affected as a result of the UK no longer willing to give its cash to the EU.
It is a troubling situation, however, as set out in her speech in Florence, the Prime Minister indicated that she wanted to open up discussions over defence and security arrangements – including a new treaty in these areas. This was meant to soften the Eastern European governments that were fearing the advance of Russia. It was also, from the UK’s perspective, designed so it could also have some influence on the timing and complexion of Juncker’s pet project: an EU Army. Of course, I’m distinctly against the UK getting embroiled in any EU defence force: however, the real point was to reassure those Eastern European governments that the UK will cover their backs, providing more finances as required.
Nonetheless, if the Government really has agreed to demands for more money, just to start trade talks, it won’t just be putting the UK taxpayer on the hook for the extra spending that could take place through this defence and security treaty, but for an extra £35 billion or so to boot.
Although Philip Hammond announced in the Budget that the government will spend £3 billion on preparations for Brexit in the UK, this isn’t even ten per cent of what is now being rumoured will be given to the EU. It looks as though instead of spending the money on public services and improving the lives of those contributing to Britain, the Government will give this cash to eurocrats in Brussels and elsewhere throughout Europe. It should resist this approach. No deal is better than a bad deal – and no deal is looking better value by the day.