Brexit secretary threatens to withhold $68.9 billion divorce bill unless Britain gets trade deal with EU

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  • Britain could refuse to pay the £39 billion ($AU68.9 billion) Brexit divorce bill unless it gets a trade deal from the EU, according to Brexit Secretary Dominic Raab.
  • He told The Sunday Telegraph that there should be “some conditionality” between the bill and a trade deal, but this goes against the advice of Britain’s spending watchdog.
  • Raab also said the government is not bluffing when it says that crashing out of the EU with no deal would be better than a bad deal.

Brexit Secretary Dominic Raab has become the latest member of Theresa May’s government to threaten to withhold the £39 billion ($US51 billion) divorce bill from the EU unless the UK gets its way in negotiations.

Speaking to The Sunday Telegraph, Raab said Britain could choose not to pay the severance settlement after leaving the European Union in March next year, if the country does not get a trade deal.

Raab, who replaced David Davis earlier this month, said some “some conditionality” between the £39 billion payment and a trade deal is needed.

“Article 50 requires, as we negotiate the withdrawal agreement, that there’s a future framework for our new relationship going forward, so the two are linked,” Raab said.

“You can’t have one side fulfilling its side of the bargain and the other side not, or going slow, or failing to commit on its side. So I think we do need to make sure that there’s some conditionality between the two.”

It is not the first time the British government has refused to pay the divorce bill. Raab’s predecessor Davis and Prime Minister May herself have previously said they would withhold the bill if the EU denies Britain a trade deal. Davis also made threats over the payment in relation to the Northern Irish border.

But the brinkmanship conflicts somewhat with the advice of the government’s spending watchdog, the National Audit Office. Sir Amyas Morse, the auditor general, told lawmakers in April that the divorce payments will become legally binding as soon as the UK signs a Withdrawal Agreement. This is because the payments are tied to Britain’s two-year transition agreement with the EU.

“The payments would fall for us to pay no matter what under international law,” Morse said. “The reason why that would be is the payments are primarily in respect of continuing membership for the extension period – they don’t relate directly to whatever the future relationship may be.”

Raab also told The Sunday Telegraph that the prime minister is not “bluffing” when she says that crashing out of the EU with no deal would be better than a bad deal. “The ball is now in the EU’s court, and don’t get me wrong, there will be plenty more negotiations, I’ve made that clear, but if they show us the same level of ambition, energy, pragmatism, this deal gets done in 12 weeks,” he said.

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