Britain could make a divorce payment to the European Union even if talks on a trade deal collapse, Dominic Raab suggested yesterday.
The Brexit Secretary said Brussels would face financial consequences if the UK left without a deal in March next year.
But he suggested that at least part of the £39billion ‘divorce bill’ agreed with Brussels could eventually be paid. Former Brexit secretary David Davis told MPs in March that Britain would refuse to pay the divorce bill unless it received a satisfactory settlement from the EU.
However, giving evidence to a Lords committee yesterday, Mr Raab suggested some money could still be handed over, albeit in a delayed manner that could play havoc with the EU’s budgetary processes.
He said: ‘The financial settlement, as it’s calibrated in the withdrawal agreement, reflects a whole range of considerations, not just the strict legal obligations, and if we left with no deal then not only would there be a question around quite what the shape of those financial obligations were as a matter of strict law, but secondly on the timing.
‘Remember that the timing of payments is actually – we overlook it on our side – rather important on the EU side because of the way money is distributed.
‘But I don’t think it could be safely assumed on anyone’s side that the financial settlement as has been agreed by the withdrawal agreement would then just be paid in precisely the same shape or speed or rate if there was no deal.’
Dominic Raab has admitted there may be a huge bill to pay even if there is no deal between the European Union and Britain
The pressure is mounting on Dominic Raab who took over from David Davis. Mr Raab is pictured with European Union’s chief Brexit negotiator, Michel Barnier,
Around half the divorce bill reflects the UK’s membership fees during a two-year transition period after Brexit, during which Britain will remain a member in all but name.
But the other half is made up of commitments, such as pensions, made during the UK’s 45-year membership.
Mr Raab also acknowledged the scale of the compromises agreed by the Cabinet in the Chequers agreement, which sets out a ‘common rulebook’ on trade, a ‘joint institutional framework’ to interpret UK-EU agreements, and the UK collecting trade tariffs on behalf the EU on goods heading from Britain into the bloc, which would avoid a ‘hard’ Irish border.
The Brexit Secretary said the EU would have been ‘cock-a-hoop’ if other trade partners like South Korea and Canada had offered to follow a ‘common rule book’ on goods, as Britain has.
Mr Raab also pointed out the political damage the Government has suffered by signing up to an agreement that is seen as a compromise too far by many Conservatives and which sparked the resignation of Mr Davis and former foreign secretary Boris Johnson.
He told peers on the Lords European Union committee: ‘We’ve made proposals which clearly involve political compromises and pragmatism. That’s why you’re hearing from me, not my predecessor.’