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There Is No Brexit Divorce Bill, Whatever Philip Hammond Says

We’re seeing that tired old trope being trotted out again. If we don’t agree whatever with the EU then we’ll have to pay the Brexit divorce bill. There is no divorce bill. There’s some payment – an interesting one to calculate to be sure – that is due whether we leave or stay. Given that we’ve got to pay it either way it’s not something that influences that decision to leave or not.

Consider that idea of it being a divorce bill. Maintain the household analogy. Such a divorce bill would be the extra costs of divorcing of course. Perhaps the costs of now running two households. Or the lawyers’ fees for getting rid of the Old Boy. We wouldn’t though consider the cost of the electricity bill already run up to be a cost of the divorce. Or, perhaps more accurately here, the future lease payments on the cars. Those are payments which must be made whether there is a divorce or not. A decision was made in the past to commit to making those payments.

Shrug, they’ve got to be paid whether the couple decide to continue to live in the same house, maintain their legal relationship or share bodily fluids. Hey, they signed the contract to pay for the cars for 3 years. Cough up. And that those leases must be paid for has nothing at all to do with whether they should divorce or not.

That’s what that Brexit bill is:

Britain will face £36 billion Brexit bill if it fails to agree a trade deal with EU, Chancellor warns MPs

Hmm.

Britain will still have to pay the EU up to £36 billion if it fails to agree a trade deal, Philip Hammond has claimed, as Brussels said no deal is now “more likely than ever”.

The Chancellor told Cabinet ministers the UK would be unlikely to win any legal battle to withhold large chunks of the Brexit bill, despite previous Government promises that the payment was conditional on a deal.

Mr Hammond’s comments angered Eurosceptics, who described his stance as “mystifying”. However, sources close to the Chancellor insisted he was as frustrated as his colleagues with the EU’s intransigence, and was merely setting out legal advice the Treasury had been given.

We’ve got to pay the bill if there’s a deal. We’ve got to pay the bill if there isn’t a deal. Because the bill isn’t about the divorce in the first place:

The correct arrangement being that we’ve been a member of a club for some decades now. We have a certain intertwining of finances to pay for certain things, some scientific cooperation, the cash stuffed into the maws of farmers and so on. There are budgets, a cycle for deciding upon them. We’re leaving before the end of that current cycle and we have previously promised that we’ll pay up to the end of that planned period. Sure, we owe some money simply because we’ve previously said we’ll pay it.

We’re civilised people, we don’t welsh on our debts, that’s that then. There is, other than just not annoying the foreigners, no connection at all between this discharge of our promises and whatever a future trade deal is. Even the European Union itself has made this point – the bill is the bill whatever subsequently happens.

In the jargon the bill is a sunk cost and thus should have no influence upon any decision about the future.

It’s a standard part of the Remoaner rhetorical strategy to tell us all that there’s some vast bill to be paid for leaving the European Union. This is not so, so much not so that the claim is nonsense. There is indeed some money that we’re going to have to pay on the way out the door. But we’re going to have to pay it whether or not we pass through that portal. Thus we cannot say the bill is the result nor even the consequence of leaving.

We’d have to pay up if we stayed. We’ll have to pay up if we leave. Whatever our relationship with the EU post-Brexit, frozen hatred, friends with benefits or not bothering to leave at all. It’s not a divorce bill therefore, is it?

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Hallowed Be
Hallowed Be
2 years ago

Well quite, but the assets? They’re fixed costs but they’re not sunk.

firefoxx
firefoxx
2 years ago

It’s even simpler than that. We are indeed leaving the club and no fees are paid after we leave. It’s the EU that has agreed to pay for its spending over the next 3 years, and not then member states. We are categorically not liable.

john77
john77
2 years ago
Reply to  firefoxx

I think that you will find that we agreed to pay our share of the EU Budget and that – unlike the UK and US budgets – explicitly includes responsibility for spending in future fiscal years.
Not one penny or Eurocent of this committed spending, however, will take place in the UK. Have I missed something?

jgh
jgh
2 years ago

If it’s a divorce, when do we get the alimony?

Rhoda Klapp
Rhoda Klapp
2 years ago

Where does the 36 billion figure come from. Is it itemized so we can see what the hell they are talking about? Does it consist of multiple obligations some of which may be real and others imaginary or exaggerated and tacked on to the total? When will the breakdown be published? I it based on Treasury assumptions which won’t stand up to scrutiny, like their forecasts?

Quentin Vole
Quentin Vole
2 years ago
Reply to  Rhoda Klapp

Part of it is allegedly to continue to pay pensions for retired eurocrats. To which the obvious answer would be: “Those pensions should be paid out of the funds you prudently set up during their employment – What’s that you say? – you didn’t create any such funds, preferring to spend the money on dinners at 3* restaurants? Well, in that case son, you’re shit out of luck.”

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