Brexit: Financial Settlement

Lord Marks of Henley-on-Thames Excerpts

Tuesday 11th September 2018 Lords Chamber

[Lord Callanan]

Yes, we stand by our commitments.

[Lord Marks of Henley-on-Thames (LD)]

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?

[Lord Callanan]

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.