LONDON — The U.K. may have some financial obligations to the EU even in the event of a no-deal Brexit, Dominic Raab told lawmakers Wednesday.
Appearing before the House of Lords European Union committee, at a special hearing ahead of the new parliamentary term, the Brexit secretary said there would be a “question around quite what the shape of those financial obligations were” if the U.K. left without a deal — but stopped short of saying the U.K. would pay nothing.
Avoiding a divorce bill of around £39 billion is viewed by many Brexiteers as one of the key upsides of a no-deal outcome. Conservative backbenchers opposed to the government’s recent softening position on Brexit have urged Prime Minister Theresa May to link payment of the divorce bill to the EU offering a generous trade deal.
In his own speech on the U.K.’s no-deal preparations last week, Raab said one of the “opportunities” of no deal would be a “swifter end to our financial contributions to the EU.”
However, Raab’s comments to the committee, responding to questions on the status of the financial settlement, agreed in December and set to be enshrined in the withdrawal deal between the U.K. and the EU, appear to suggest that the U.K. accepts there would at least be some money to pay.
Raab said that the “contours” of a withdrawal deal were now in sight.
“The U.K. always pays its dues,” Raab said. “Equally, 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.”
“I don’t think it could be safely assumed on anyone’s side that the financial settlement that has been agreed as part of the Withdrawal Agreement would then just be made in precisely the same shape or speed or rate if there was no deal,” he added, “that would be a peculiar position for the U.K. to take because we view the package as a whole.”
Commenting on the wider Brexit negotiation, Raab said that the “contours” of a withdrawal deal were now in sight, but admitted that the talks could “creep beyond” October’s European Council. EU chief negotiator Michel Barnier had previously set an October deadline for a deal, but in remarks after the latest round of negotiations last week indicated that it could slip to the “beginning of November, but not much later than that.”
While admitting U.K. “frustrations” with what he called the EU’s “legalism” in the negotiation, particularly in relation to its backstop proposal to avoid a hard border between Ireland and Northern Ireland, Raab said that he had developed a good professional and personal “rapport” with Barnier.
He urged the EU to take seriously the U.K.’s latest proposals for the post-Brexit relationship — as set out in last month’s Brexit white paper — admitting that they had required “political compromises and pragmatism” on the part of the U.K.
On the U.K.’s proposal to follow a common rulebook with the EU governing the trade in goods, he claimed the EU would have been “cock-a-hoop” had Canada or South Korea made such a proposal during their trade negotiations with the bloc.