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Brexit: Financial Settlement

Volume 785: debated on Thursday 12 October 2017


Asked by

To ask Her Majesty’s Government when they expect to report to Parliament on their negotiations on reaching a financial settlement with the European Union in the Brexit talks.

My Lords, the Prime Minister provided an update to the House of Commons on Monday following the September negotiations. This covered finances and was repeated in this House. The question of the EU budget can be resolved only as part of the settlement of all the issues that we are working through. We are approaching discussions constructively and are confident we can achieve an outcome in the interests of both sides.

I take the point, but when does my noble friend expect the valuation of EU assets to be completed? Is it not the case that if proper account is taken of the assets, we could even end up with the EU paying us, rather than the other way round? You first heard the idea here.

What a very interesting idea my noble friend puts forward—I hope the EU Commission is listening very carefully. However, he makes the serious point. When we issued the Statement back in July, we made it clear that we will honour our obligations, both legal and moral, to the European Union but also that that is reciprocal. There are obligations from the EU to us, including the valuation of assets. It is a technical matter and part of the discussions. I urge the Commission to get on with the work of carrying out that valuation and considering a fair apportionment of the amount.

My Lords, the wording of the Florence speech may have been seen as helpful here, but I fear that in Brussels and Berlin it was seen as opaque in its real commitments to the budget hole and obligations such as pensions—where I declare an interest—and future relations. If we are hoping that the European Council next week will at least widen a little the mandate of Mr Barnier to prepare for phase 2, would it not be wise to put some figures on those sums?

My Lords, this is a technical matter which will decide the future not only of this country but the rest of Europe. One does not go into that kind of negotiation by just opening the doors of the Treasury and offering a certain number of millions or billions of pounds. What we will do is look very carefully at the paper put forward by the Commission during the summer, in which it set out the list of treaties and the clauses of those treaties and regulations that it says form the legal basis of the money that should be paid by this country. We want to be able to face the British people and say: this is our obligation, this is why we agreed to pay it, and we can justify every part of that money.

My Lords, will the settlement take into account the failure of the auditors of the Community to certify the accounts for more than 10 years?

My Lords, I was in Brussels this week and I heard welcome for the Florence speech, but does the Minister accept that this is not just a matter of the figures—that comes in the longer term—but a question of process. Where I and others are worried is that the British Government do not seem to be clear about a willingness to go on sorting out the bills between both parties over a series of years, which will go beyond 2019.

My Lords, we have made it clear that we understand that some of the discussions about our future relationship will involve continuing investment in projects across Europe. Clearly, the initial discussions about the withdrawal agreement are focusing on those areas where there are identifiable obligations. It is important that we move on to the next stage about our future relationship because, as the noble Lord has just pointed out, there will be continuing commitments that we may indeed wish to make.

My Lords, are we not singularly fortunate in having a Chancellor who is entirely sensible and optimistic, who looks forward to a good deal and who realises that no deal would not be good for this country, and should we not give him every possible support?

My Lords, may I ask the Minister whether the huge value of our fishing rights to 80% of our fish stocks will be included in the settlement, either financially or by being repatriated?

My Lords, this is clearly a crucial matter for all those involved, not only in the industry at first cast but throughout the supply chain. It is a matter for discussion as we arrange the details not only of the withdrawal agreement but about our future relationship. I assure the noble Earl that the interests of all those involved are being taken deeply into account on that matter.

My Lords, the FT today says that the Brexit talks are at a “virtual political standstill”. One official involved says that:

“There was nothing, zero, no progress”.

The British Chambers of Commerce says that further delay in opening trade talks risks a “lose-lose scenario”. How many more dire warnings about what this will do to the economy and jobs do the Government need before they start negotiating seriously?

My Lords, it was made clear by Monsieur Barnier and others that the Prime Minister’s speech in Florence added new momentum. That momentum has continued, and that was made clear in the Prime Minister’s report to Parliament on Monday. This week’s negotiations have proceeded at a technical level, and we will hear later statements from the Secretary of State and Monsieur Barnier about that. However, as we move to the stage of wanting to have negotiations about our future partnership, there will be political decisions to be made about that. I and my colleagues have been engaging across Europe in setting out the reasons why we think that it is right, for the economy of all countries of Europe, that we move to that negotiation swiftly.

My Lords, is the Minister at all struck by how united the Brussels team is on behalf the European Union and how divided ours is?

My Lords, I am struck by the way the negotiating teams are carrying forward the interests of their countries as a united front. Whatever the media like to report, the fact is that decisions taken are done so at Cabinet level in unity.

My Lords, can the Minister please be candid with the House? Can she say whether anything substantial or major has been definitively agreed in phase 1? Can she give some examples and assure a doubting Chamber?

My Lords, I have given several examples in the past and I am happy to give some of the latest now, but until there is a full agreement there is nothing agreed. To give an example of the agreements so far, we have agreed most aspects of social security co-ordination, which means that we have confirmed that EU and UK citizens will continue to benefit from the co-ordination rules for aggregating contributions made in the EU and the UK, both before and after exit, and the rights that flow from such contributions with regards to an uprated state pension and reciprocal healthcare. I am very grateful to the noble Lord for asking for detail.