WE OWE THEM NOTHING
WHY IS THERESA GOING TO PAY THE EU £40 BILLION FOR NOTHING?
What should have happened in early 2017…
A legal and common sense explainer of the UK’s obligations and why no bill is payable
This weekend the papers are full of speculation about Mrs May’s anticipated capitulation to the EU over the Chequers proposals, making them worse than they already are.
Instead of speculating on that, we look at the minor matter of the £40 billion (it will be more of course) that she has already agreed to give away, and provide you with some facts.
BREXIT FACTS4EU.ORG SUMMARY
THERESA MAY’S £40 BILLION EU GIVEAWAY
If there had been a legal case for a ‘divorce bill’ the EU would have produced it. They haven’t, because there isn’t one.
Regardless of Theresa May’s new capitulations over membership of the Customs Union and Single Market, which we are due to hear about this coming week, a major stumbling block in Parliament will occur when MPs are asked to sign away £39 billion for “a pig in a poke”.
WHAT HAS THE UK AGREED TO PAY?
On the question of what Theresa May has agreed to pay to the EU, no details have been revealed by the government, except that it will be in the order of £35 – £39 billion. There is no government paper outlining this.
In practice – and based on years of experience of looking at EU finances – the figure will most definitely exceed £39 billion and we would be surprised if it turned out to be less than £50 billion. Apart from anything else, the EU has ‘off-the-books’ funds which we have reported on many times, and which are never included in totals when the government talks of the UK’s financial contributions to the EU.
Tomorrow we will publish what the EU expects the UK to pay for, in detail. Don’t miss it.
THE UK DOESN’T OWE ANYTHING
18 months ago we published an explanation of why no divorce bill was payable. 6 months later a report was issued by Martin Howe QC of Lawyers for Britain and Charlie Elphicke MP of the ERG, which confirmed our position. Below we summarize each report.
1. THE PRO-BREXIT FACTS4EU.ORG POSITION, APRIL 2017
Article 50 of the EU Treaty states that the Treaties “shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification”.
In other words, on 29 March 2019 the UK will leave the EU and will no longer be bound by its rights or obligations. The Treaty does not set out any financial obligations being settled prior to withdrawal. In the absence of such mention, in broad terms international law assumes they do not exist.
The ‘Brexit bill first’ demand was a political action by the EU, with no legal basis
Denial of any talks from June 2016 until June 2017 was a political action by the EU, with no legal basis
Long-term commitments it enters into are commitments for the EU, not for its individual member states
It follows that when a member leaves, it no longer has legal obligations towards future expenditures
No legal provisions for a Brexit bill in the Treaty
Expenditure commitments of the EU come under EU secondary legislation
Secondary legislation has no basis except under the Treaty, which will no longer apply to the UK
UK must continue paying annual contributions only until 29 March 2019
EU incomes and expenditures are not fixed – but no attempt by EU to adjust plans/mitigate expenses
2. THE LAWYERS FOR BRITAIN / ERG POSITION, SEPT 2017
In March 2017, the pro-EU House of Lords’ EU Committee produced their report, which concluded (perhaps reluctantly) that the UK had no outstanding financial obligations to the EU and that the ECJ would have no jurisdiction over this.
On 07 Sept 2017 Charlie Elphicke MP of the European Research Group, and Martin Howe QC of Lawyers for Britain, produced a 30-page report which demolishes all known claims by the EU for what the EU refers to as: ‘The Single Financial Settlement’
Main conclusions of the report:
No basis in law for further payments after March 2019
No basis for payments to EU’s pension scheme, unless EU gives UK share of all assets
No-one pays or receives on entry into the EU, therefore no-one pays or receives on exit
No precedent in international law for a divorce bill such as this
European Investment Bank (EIB) is a separate case: UK is entitled to its shares (c £9 billion)
ECJ has no say in all of this – UK could propose that neutral international tribunal decides
The report’s authors were unsurprisingly frank about it: Charlie Elphicke MP said: “The EU is trying to blackmail Britain into handing over billions of pounds. Yet this detailed analysis shows that legally we owe the EU nothing. In fact, it turns out they owe us €10 bn.
“The Government should stand firm and not be blackmailed into a multi-billion pound divorce bill.”
Martin Howe QC for Lawyers for Britain said: “In law, we will owe no money at all to the EU when we leave, with some small items being more than cancelled out by the value of the UK’s shareholding in the European Investment Bank.”
FORMER MINISTER SPOKE TO PRO-BREXIT FACTS4EU.ORG
“Frankly barmy sums” – former Minister
We spoke to former Cabinet Minister Owen Paterson MP for his reaction. Mr Paterson has always been clear in his view on the Brexit bill and he told us: “This report clearly demonstrates that there is no case whatever for paying any of the frankly barmy sums demanded by EU negotiators.”
When the EU eventually got around to producing its three main negotiating points in summer 2017, one of these was the so-called ‘financial settlement’.
Naturally the EU talked mostly about the other two subjects: ‘Citizens’ Rights’ and the border with Northern Ireland. In reality, these were window dressing for its main objective, which was to secure an agreement for the UK to pay as much money as possible to the EU on departure. This proved easier than the EU thought, which is one of the reasons you have mostly been hearing about the other two ‘issues’.
FORGET CHEQUERS FOR A MINUTE
Currently there is fevered speculation about a move in Theresa May’s position. The rumours are that she is planning to ‘pivot’ on this, which in simple terms means a U-turn. It is said from many sources that she will offer what amounts to the UK staying in the Customs Union.
Regardless of this there is the question of the UK signing up to some vague political statement about a future trading arrangement, as well as signing up to the payment of a huge ‘divorce bill’.
We are as certain as we can be that the Prime Minister thinks she can somehow persuade Parliament at the last minute to accept the divorce bill, without any real details of the future trading relationship, nor any guarantees or specific dates by which the EU must agree a trade deal. We agree with Owen Paterson MP when he says this is ‘barmy’.
The EU is a highly political animal. It will use anything it can to secure its objectives, no matter how tasteless its methods and no matter the damage to its citizens. The way it has weaponized the Northern Ireland border issue is a case in point.
If readers want to retain just one thought about the financial settlement or ‘divorce bill’, it should be this. The EU uses legal argument when it suits it. Conversely, it conveniently has amnesia when it is not to its advantage. For example when Angela Merkel unilaterally tore up the Dublin Protocol and opened the floodgates to millions of third world immigrants, barely a word was said. The same was true of all the breaches of the Schengen agreement which were caused by her actions. Why? Because this was Merkel, Chancellor of Germany.
We have considerable experience of studying the EU and its methods. Believe us when we say that if the EU had a legal leg to stand on when it comes to any idea of a financial settlement, it would have shouted this from the rooftops of Brussels long ago.[Sources: EU Treaties | EU Parliament | Lawyers for Britain / ERG] 06.55am, 07 Oct 2018