Divorce bill threat is textbook bad move from May

David Hannay is a member of the House of Lords and former UK ambassador to the EU and UN.

The revelation earlier this week by both Theresa May and Dominic Raab was that, if we crashed out of the EU with no deal, the UK would not pay the divorce settlement agreed in principle last December – calculated to amount to £35-39 billion, but which could be considerably higher. This was almost certainly, like so many other moves in this long running saga, principally designed to appease the hard Brexiters, who have in recent days been filling parliamentary meeting rooms with their plotting against the government’s Chequers plan. It was only secondarily to put the wind up the other 27 EU countries.

But will the move have either of these effects? Probably not. After all, the hard Brexiters have for months now been telling everyone that one of the attractions of no deal is that we would not pay a penny; and here was the government saying we would pay quite a lot (carefully not quantified) but not as much as previously forecast. As for the other EU members, a shrug at another piece of bluff and bluster seems the likely reaction, tinged with concern that the government might not, after all, be negotiating in good faith.

However, the implications of what was revealed this week could be quite troublesome for the government further down the track. If the £35-39 billion is substantially more than we consider we are legally required to pay, then what did we get for the extra sums on top of our legal obligations? Agreement to move on to discussing the framework for a new UK/EU relationship? But that is required by Article 50 in any case. The Irish backstop, whose legal formulation in the Withdrawal Treaty and whose implementation are causing the government so much agony? Don’t make me laugh.

Perhaps, then, for some kind of advance payment commitment for the standstill transition period which was subsequently agreed in March? Very possibly, but in that case it was a pretty poor deal since the 21-month transition period agreed in March is, in the view of business and of every informed commentator, completely inadequate in its duration to complete negotiation of the detail of the new relationship. It merely postpones the cliff edge from March 2019 until January 2021.

All this will need to be thrashed out in Parliament if and when a vague “blind Brexit” deal is struck in November or December – still a more likely scenario than no deal – and the Commons have to vote for the divorce payments required by the Withdrawal Treaty, which they would be being asked to approve. Will the hard Brexiters be happy paying what the government has now admitted is more than we are legally obliged to pay? Not terribly likely, so the government could be in trouble. And, if it is no deal, the government’s half way house of paying a bit but not everything that was agreed last December seems likely to please nobody and to give rise to endless international litigation and much bad blood with the EU 27.

So, a clever move? Not really.