Lords EU Committee launches new inquiry into the UKs no deal financial obligations

The Committee's previous report, Brexit and the EU budget, concluded that Article 50 allows the UK to leave the EU “without being liable for outstanding financial obligations under the EU budget and related financial instruments, unless a withdrawal agreement is concluded which resolves this issue.”

However, the report also warned that the political and economic consequences of doing so would be “profound” and noted that the EU may well demand a financial contribution before agreeing a preferential trading relationship, as well as a transition period.

Giving the increased possibility of a ‘no deal' Brexit, the Committee has decided to revisit the issue of the UK's financial obligations to the EU, focusing in particular on the possible consequences of the UK deciding not to pay.

The Committee has issued a public call for evidence and urges interested individuals and organisations to submit evidence to the inquiry.

The Committee seeks evidence on the following topics in particular:

• What are the different scenarios under a ‘no deal' Brexit and how could these affect the UK's financial obligations to the EU?
• What is the status of the UK's financial obligations to the EU, and the EU's financial obligations to the UK, in the event of a ‘no deal' Brexit?
• How do the UK's financial obligations to the EU in a ‘no deal' scenario compare to those agreed under the draft financial settlement?
• How have the Article 50 extensions affected the value of the UK's financial obligations to the EU? How could any further extensions affect this?
• If no agreement is reached with the EU, how would the UK's financial obligations be legally enforced? Under which court's jurisdiction could such a case be considered?
• What would the political consequences be of the UK and EU failing to reach an agreement on their mutual financial obligations?
• How would UK organisations currently receiving EU funding be affected in a ‘no deal' scenario?

Lord Sharkey, Chair of the EU Financial Affairs Sub-Committee, said:

“As the prospect of a ‘no deal' Brexit appears to be increasing by the day, it is vital that there is greater clarity over what such a scenario would mean for the UK's financial obligations to the EU.

“The Committee will consider how questions over the UK's payment of any obligations could be decided and enforced, as well as the consequences of any decision to leave the EU without an agreement on a financial settlement.

“We encourage, and welcome, submissions of written evidence from anyone with knowledge of and an interest in these issues.”

The deadline for the submission of written evidence is Wednesday 28 August 2019.

Click here to read the full call for evidence and find out how to submit evidence.