Britain could leave EU without paying £50bn obligation, Lords committee says

Tareq Haddad

The UK could leave the European Union without paying it a penny, some members of the House of Lords have said.

It followed uncertainty about whether Britain would have to fulfil obligations to the EU budget made by former Prime Minister David Cameron in 2013.

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An evaluation by the EU's head Brexit negotiator Michael Barnier and his team concluded Britain will have to pay into the budget an amount ranging from €55bn-€60bn (£47bn-£52bn), but this has now been disputed.

In a report published on Saturday (4 March), the House of Lords EU financial affairs sub-committee said Britain could legally leave without paying its obligations.

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"On the basis of the legal opinions we have considered we conclude that, as a matter of EU law, Article 50 [of the Treaty on European Union] allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget and related financial instruments," said Lady Falkner of Margravine, the Liberal Democrat peer who chairs the sub-committee.

In spite of the finding, the peer said the UK should negotiate a "withdrawal agreement" with EU member states so as to maintain a good relationship with the union and allow Britain to negotiate for single market access.

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"The political and economic consequences of the UK leaving the EU without responding to claims under the EU budget are likely to be profound," Falkner added. "If the UK wants a preferential trading relationship with EU, including a transitional arrangement, the EU partners may well demand a financial contribution post-Brexit."

The report also said: "The government will have to set the financial and political costs of making such payments against potential gains from other elements of the negotiations."

Ingeborg Grässle, a German centre-right MEP who chairs the European parliament's budget control committee, told the Guardian she was astonished at the "really disappointing" conclusions.

"It is not about the money. It is about responsibilities. The question is, do you stick to your engagements?" she said.

Grässle was among the people who gave evidence at the Lords committee and described the threat of Britain not paying its EU obligations as "putting a knife on the table".

She said: "The EU feels that we have to organise a real divorce and we have to sort out the money, the kids, who gets the dog and the cat… and for the British, it is as if they are leaving a golf club."

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