Does a no deal Brexit mean no divorce bill?

Published: 27th Aug 2019

In brief

Claim

If we leave the EU with no deal, the divorce bill is no longer strictly speaking owed.

Conclusion

It’s not clearly set out that the UK would be obliged to pay anything if we left with no deal, but the EU could take the case to the International Court of Justice on the grounds of the UK’s repeated commitments to pay.

"If we come out without an agreement it is certainly true that the £39 billion is no longer strictly speaking owed."

Boris Johnson, 25 August 2019

Speaking over the weekend, Boris Johnson stated that if we leave the EU with no deal, then “strictly speaking” we wouldn’t have to pay the EU a sum of £39 billion.

It’s not clearly set out that the UK would be obliged pay anything if we left with no deal, but the EU could take the case to the International Court of Justice on the grounds of the UK’s repeated commitments to pay.

£39 billion has long been cited as the total size of the “divorce bill”. This is the amount the UK would owe the EU after Brexit to cover its outstanding financial commitments to the EU (things like commitments to pay into the EU budget until 2020).

The latest estimate puts the total divorce bill slightly lower, at £33 billion (€36 billion), assuming the UK departs on 31 October this year.

The UK and EU agreed on the “the scope of commitments” of a divorce bill in December 2017. In November 2018, the UK and EU set out a draft withdrawal agreement which reaffirmed the UK’s commitment to paying a divorce bill.

Until the UK parliament approves that draft withdrawal agreement, the divorce bill is not binding. (It has so far rejected the withdrawal agreement three times).

This is presumably what Mr Johnson is referring to when he says “strictly speaking” the divorce bill would no longer be owed if we left with no deal. The withdrawal agreement— which sets out the UK’s commitment to pay—will not be binding in this scenario.

That would be far from the end of the story, though.

It’s highly uncertain whether or not the UK would have to pay the divorce bill if we left the EU with no deal on 31 October 2019.

Experts at UK in a Changing Europe told us in February that, under international law, it’s not clearly set out that the UK has to pay anything once it has left the EU. However, the EU would be within its rights to take the case to the International Court of Justice.

The grounds for this would be the UK’s repeated commitments to pay—this was set out most importantly in the Joint Report of December 2017, which set out principles on a number of issues in the negotiations.

The Institute for Government think tank believes that the outcome of such a court case would be hard to predict.

In addition, UK in a Changing Europe told us earlier this year that the UK might consider the reputational damage that might be caused by not paying. For example, not paying the bill might cause other states with whom the UK is negotiating trade deals, to question the value of the UK’s word in negotiations.

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