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Even at £50 billion, the ‘divorce’ bill from the EU is a price well worth paying

29 November 2017

8:01 AM

29 November 2017

8:01 AM

There will be howls of outrage in some quarters if it is confirmed that the government has offered the EU a ‘divorce’ bill of £50 billion or so. Some on the leave side of the debate have insisted that the bill should be zero. They ask: does the EU not owe us some money for our share of all the bridges we have helped build in Spain and railway lines in Poland. But it was never realistic to think that we could leave the EU and maintain good relations with the bloc without paying a penny – even if a House of Lords report did seem to suggest that that would be legally possible. We are in the process of  creating a new relationship with the EU, not ending it altogether.

Having agreed an EU  budget which stretched until 2020 it was right to fund these programmes until the end of that period – which after all is only a year after our departure. Thereafter there will be ongoing pension obligations, but a fraction of what we would otherwise be on the hook for. The government’s offer is a mark of serious intent, proof that we want constructive and co-operative relations as we start to discuss the terms of a free trade deal.  The money, which will be payable over many years, is still a saving when compared to the ever-rising sums which we would be required to pay had we decided to remain in the bloc.

Brexit was never about cash: polls show that most people who voted leave did actually think that it would be a costly, painful process. They also thought it would be, on balance, worth it.

By the time we leave we will have regained our freedom to make our own trade deals with outside countries. Providing that we use that freedom and build new export industries without compromising our existing EU trade we should be able to grow the economy in such a way as to make the leaving bill seem good value.

Of course, there are still hurdles to overcome. As has been made clear on both sides, nothing is agreed until everything is agreed. The EU has yet to accept the government’s offer, and assuming trade talks do start in January, we can still expect months of bluster. The EU is likely to want to try to exclude financial services from a trade deal and we must ensure that they are included.   But at least talks should now be able to start in a constructive manner.  Now we have put money on the table, the EU’s negotiating team knows what it would lose if it were to collapse the talks through sheet obstinacy. From now on every member state knows that a failure to keep Britain at the negotiating table will mean cancelled projects – or higher contributions from their own coffers.

There is also the issue of the Irish border to resolve. As David Trimble explains in the forthcoming Spectator, it is an issue which has flared up thanks as much to the internal politics of the Irish Republic as to the practical workings of the EU. It should not be impossible to come up with an arrangement which keeps traffic flowing freely across the border while police and customs officials continue to work – as they already do – to enforce the different fiscal and regulatory regimes which exist in Ireland and the UK.

So long as the government is able firmly to rebut the inevitable charges of a sell-out it should now emerge from a troubled few weeks in better shape. Until last week, some believed that the Budget would deliver the coup-de-grace to the government. Yet, in a rarity for a modern Budget, there has been no unravelling.  There was little to inspire, but little to trip up the government either. Theresa May, may yet end the year having successfully delivered a budget and negotiated the biggest hurdle on the Brexit talks. If she can do that, she’ll be in the best position she’s been in since the election so weakened her.

This week we have had the fuss over the publication of the Brexit impact assessments, of which edited versions have been handed to the select committee on exiting the EU. Whatever information in contained within the parts which have been edited out – and there are perfectly good reasons for withholding some material which might compromise the negotiations in Brussels – there is an obvious question to be asked: just how much use are the assessments anyway? We know how laughably bad economic forecasts have proved to be in the past, none more so than the gruesome assessment published by George Osborne a month before the 2016 referendum.

Brexit always was going to be a step into the unknown, the consequences of which no-one can predict with accuracy. Moreover, Brexit itself will not make the country richer or stronger – it is the removal of a constraint. For months, the future has seemed to be one of either/or – either we trade freely with the EU or we make our own way building new alliances elsewhere in the world. If the result of the government’s offer is that trade talks can begin and that we can now contemplate both these things, it will be a price well worth paying.


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