The Billion Pound Brexit divorce bill

 

Newspapers report today that the UK government is willing to stump up something in the region of £36bn to leave the EU.

The figure comes as a potential surprise because of the bullish stance taken by the Brexit secretary David Davis, as well as Boris Johnson and others in the government who had claimed the UK would pay little or nothing to leave the EU. The Union’s negotiator had claimed a figure nearer to £50bn was necessary in order to secure a smooth exit, so the apparent willingness to hike the UK’s figure closer to the EU one could be seen as yet another climb down.

It shouldn’t be a surprise that if the UK does leave the EU, it will be left with a big bill to settle, despite Johnson’s assertion some time ago that the EU could “go whistle” for the money. The UK’s negotiating hand having triggered Article 50 and in attempting to depart the Euro-club is almost comically weak, and the need to settle up before going is a fairly legitimate part of the process.

Although the sum is routinely referred to as a ‘divorce bill’ this is a rather misleading name. It implies something along the lines of having to pay legal fees to disentangle a marriage, which might keep solicitors in the money, isn’t a fee anyone would be keen to pay.

A better analogy might be that of settling a restaurant bill. A big meal is in full swing with lots of diners sharing food and drink. The UK announces that it needs to up and go – an early morning net day perhaps? In that situation not settling for the proportion of nosh and booze consumed would be pretty unforgivable, but that is essentially what the hard Brexiteers are saying should happen. In real terms the UK, as part of the EU, was party to many commitments as part of the EU’s 7-year budgetary cycle, many of which have been started but not finished. If the UK wants to go it’s only fair that the commitments jointly made whilst still a full and willing member are honoured. Hence the bill.

That said, it’s a matter of political negotiation how big the bill will be. It was never written in advance what the liabilities of future commitments would be if a country were to head for the exit because it wasn’t seriously considered. In the restaurant analogy, there was a menu but not really any clear prices. The EU – as seasoned negotiators will quite predictably highball the UK with a figure above what they might accept, safe in the knowledge that the clock is ticking and the UK is set to lose out disproportionately if the bill is not sorted, because post-Brexit trade negotiations will only commence once that issue has been put to bed.

The issue of the so-called divorce bill is a really good example of all that is wrong with Brexit. The UK public – via the right wing press – are being presented with the propaganda that it is blood money. The Tory government are cynically exploiting people’s ignorance of how the EU actually functions. The cabinet is at first unclear, then divided on the issue, before basically capitulating because there is no negotiating position to speak of and a lack of people to carry one out anyway.

Expect much more of this. A fairly good indicator of what’s going to happen in about 4 to 6 week’s time with Brexit is to watch what Davis-Johnson-Gove cite as absolutely-never-over-my-dead-body red lines today.

 

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One thought on “The Billion Pound Brexit divorce bill

  1. […] In essence Davis stated that the EU was not prepared to honour pre-existing legal commitments to make budget contributions from the date Britain officially leaves the EU in 2019. In other words, things we promised to pay for in 2016, say, but wouldn’t need to actually be paid for until 2020, we would duck out of paying. This is a really bad, stupid position, as I’ve explained previously. […]

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