The British government is ‘not obliged’ to pay the EU a £50 billion Brexit divorce bill

LONDON – Britain could end up leaving the European Union with no legal obligation to pay any sort of Brexit divorce bill, the House of Lords EU Financial Affairs Committee has claimed.

If Britain reaches the end of the two-year Article 50 negotiation period without any concrete deal in place with the 27-EU member states, it would be in a strong legal position not to have to pay any formal settlement with Brussels, the Lords committee said, according to a report from the BBC.

“Although there are competing interpretations, we conclude that if agreement is not reached, all EU law – including provisions concerning ongoing financial contributions and machinery for adjudication – will cease to apply, and the UK would be subject to no enforceable obligation to make any financial contribution at all,” it said.

As it stands, Britain is expected to be hit with a bill of roughly £49 billion, which will effectively be a means of settling all its outstanding liabilities with the European Union.

The EU’s chief Brexit negotiator Michel Barnier will tell British government to hand over the cash once talks formally begin, but is said to be expecting talks about the bill to take up as much as a quarter of the Article 50 period.

“He thinks we will be discussing money and acquired rights [of expatriate citizens] until December,” a “senior eurozone official” who is in contact with Barnier told the Financial Times in late February.

“No trade, nothing about the future, just the past.”

Given that the UK is expected to trigger Article 50 at some time in March, and that the official negotiation period for agreeing a Brexit deal is two years, that would represent substantially more than a quarter of the entire period.

So while Brussels expects to flesh out a deal on the settlement before Christmas, the Lords committee argues that no bill may end up being paid, even though it would be highly damaging to the rest of the negotiations.

“This would be undesirable for the remaining member states, who would have to decide how to plug the hole in the budget created by the UK’s exit without any kind of transition,” the committee said.

“It would also damage the prospects of reaching friendly agreement on other issues.

“Nonetheless, the ultimate possibility of the UK walking away from negotiations without incurring financial commitments provides an important context.”

These new developments come just weeks before May is set to trigger Article 50 of the Lisbon Treaty and enter talks with EU leaders over the terms of Britain’s departure. The government is facing something of a hurdle in the House of Lords regarding the residency rights of EU citizens after Brexit. Parliament’s upper house voted this week