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Analysis

Brexiters play perilous game with EU ‘divorce’ bill

by Luke Lythgoe | 07.08.2017

Over the weekend, the Sunday Telegraph reported that “senior Whitehall officials” were willing to pay up to £36 billion to settle Britain’s so-called Brexit “divorce” bill. This compromise, somewhere between the UK’s upper limit and the EU’s reported £50 billion starting point, was said to be intended to break the negotiation deadlock and kickstart talks about trade and the future EU-UK relationship. With less than 20 months until the Brexit deadline in March 2019, and even less time for the negotiations themselves, the Brexit clock is ticking increasingly loudly.

But Brexiters’ reaction to the negotiators’ alleged plan was furious, with the usual suspects accusing civil servants of trying to “ram through” the divorce bill while key members of the Cabinet – including the prime minister – are on holiday. Jacob Rees-Mogg, part of a bloc of pro-Brexit Tories in Parliament, warned that the agreement “would need not only cabinet approval but the approval of MPs”.

Theresa May has since ruled out paying £36 billion, with sources close to the PM saying the sum was “far above what she was willing to consider or was being discussed”. Nevertheless, both May and Brexit secretary David Davis have previously accepted that some payment will have to be made, and it is unclear how much influence Brexiters in her party had over May’s dismissal of this latest proposal.

If they continue to dig in on the divorce bill, Brexiters will be playing a dangerous game – certainly for Britain’s economy, which could be driven off a cliff edge with no deal, but potentially for their own Brexit dreams too.

The press are already reporting the possibility of May’s team walking away from the negotiations this autumn if no progress is made. Before the general election, Brexiters might have assumed a breakdown in talks would result in the PM putting her “no deal is better than a bad deal” mantra into practice, crashing out of the EU and thus achieving the hard Brexit they desire.

But June 8 removed May’s parliamentary majority and appeared to show a swell of support for a much softer Brexit. Negotiations breaking down now would begin several unpredictable months of economic turmoil and political scrambling. It’s not inconceivable that the public, and whoever’s running the country by that point, could decide to ditch Brexit altogether.

Perhaps Brexiters are reluctant to accept any payment because of how it looks against their empty referendum promises to provide £350 million every week for the NHS? Nevertheless, the existential consequences for Brexit if the divorce bill isn’t agreed clearly concerns some Leavers, such as Boris Johnson’s parliamentary private secretary Conor Burns who sensibly told the Telegraph: “Many of us who campaigned to leave the EU are more focused on the prize than the price.”

It is unlikely hardball tactics will work against the EU either. Unlike May’s Cabinet, the other 27 EU members are united in wanting the UK to meet its commitments and cough up – otherwise the union will be left with a budgetary black hole which would either need plugging by richer creditor nations or see beneficiary states missing out on funding for long-planned projects. The threat of a British walkout also lacks impact, since the UK economy would be far more badly hit than that of the EU.

A sensible way forward for the government is to link the payments to certain benefits from the EU, for instance on trade or cooperation over science, rather than presenting it as a bill for leaving the club. In many ways that was what the £36 billion figure represented, attached as it was to the condition that talks on trade and transitional arrangements could get started.

Leading Brexiters would be wise to start thinking in terms of compromise and moving negotiations forwards, putting the UK economy before their Brexit bluster. It is all very well for Boris Johnson to tell Brussels to “go whistle”, but he could ultimately find himself whistling as his Brexit dream burns.

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Edited by Bill Emmott