To ask Her Majesty’s Government what assessment they have made of the extent to which the financial settlement agreed with the European Union will be justiciable, in part or whole, in European Union, national or international legal systems, in the event of the United Kingdom renouncing the agreement.
My Lords, the Prime Minister has been clear that the financial settlement reflects the UK honouring our outstanding commitments made during the period of our membership. Our estimate, based on current assumptions, is that it will fall within the range of £35 billion to £39 billion. This settlement has been put forward within the context of an overall agreement, under Article 50, of the UK’s withdrawal, taking into account the future relationship.
I thank my noble friend the Minister for his Answer. Do HMG realise that while any doubt remains as to whether the debts owed to the EU 27 Governments will be honoured, no Minister or civil servant in any member state can contemplate the UK taking part in any other activities, such as Galileo, which might add to those liabilities and thus increase the debt that might not in the event be paid?
Does it? It would be quite nice to hear from the noble Lord whether he really means that it would fall away. But whether or not the Government will honour the commitment they have given, can he confirm that they will honour the promises they made to our farmers, and indeed the recipients of other EU funds—whether structural or research money—to maintain the full amount that they receive from Brussels at the moment?
My Lords, the December agreement on the divorce bill was accepted by the Minister in his first Answer as settling the UK’s existing obligations. Do the Government now accept the Institute for Government’s view that if we reneged, the EU could seek redress, if not in the CJEU, then in the International Court of Justice in The Hague, under Article 70 of the Vienna convention? Does the Minister also agree that such a dispute would not only undermine future co-operation with the EU, as the noble Lord, Lord Balfe, said, but trash the UK’s reputation for honest dealing and would encourage other WTO members to object to our schedules, which any one of the other 163 members could do?
Of course, we will respect our legal obligations. We are a law-abiding nation; that goes without question. But there are several conflicting legal opinions as to our liabilities. Your Lordships’ House held a committee of inquiry under the chairmanship of the noble Baroness, Lady Falkner, on which I was privileged to serve. Its conclusion was:
“On the basis of the legal opinions we have considered, we conclude that, as a matter of EU law, Article 50 TEU allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget and related financial instruments”.
There are alternative legal opinions—in fact, I have spent the morning reading most of them—but it is a complicated area of law. Of course, we want none of these scenarios to come to pass; we want to reach an agreement. Indeed, we have reached an agreement, and we will honour our commitments within the context of the withdrawal agreement.
Did the Minister notice that the head of the NAO has said, formally and on the record, that we will be responsible for paying the bills whether or not there is a withdrawal agreement? Does he accept that the costs of £39 billion are the costs of past commitments, not of future access? They are computed as the cost of the commitments we have already entered into. Is he seriously contemplating that the UK would become a defaulted state?
At the risk of repeating myself, I said we will honour our legal commitments, but it is a complicated legal area. There are some great legal brains in this House who would, no doubt, want to opine on the matter, but there are different opinions. Ultimately, I suspect this will come down to a matter of politics. We do not want to get into a dispute on these matters and so we have negotiated a settlement. It is hugely complicated, there are a number of different financial areas involved, but we remain confident that we will reach a withdrawal agreement and meet those commitments.
My Lords, as a member of the EU sub-committee chaired by the noble Baroness, Lady Falkner, I can say that the Minister quoted it correctly. There is no enforceable action by law, but the committee never denied that the UK would have moral commitments.
I hope we will not get into these scenarios. The Vienna Convention on the Law of Treaties 1969 has been mentioned and that might also apply in such circumstances but, as I said, we do not want to get into these scenarios. We are confident that we will reach a deal and as part of that deal we have agreed a financial package.
My Lords, it will not surprise any of us that there should be differences of legal opinion about this sort of question. I hope the Government will be able to press forward with the best proposal I have seen—the one agreed at Chequers—in order that this becomes a purely academic question.
Obviously, it is to be hoped that we do not get into any disputes. We remain committed to the Chequers deal; as I said yesterday, we are awaiting a formal response from the EU. We think it is a good proposal, involving compromise on our behalf. We need now to see similar movement and compromise on the EU’s behalf.
This matter is the subject of ongoing negotiation. We have already made a substantial commitment to Galileo but we will need access to all parts of it if we are to continue to participate. That is what we want to do and it is what we are negotiating for. These matters remain subject to discussion.