Brexit and the EU Budget (EUC Report) — House of Lords, 2017-04-06
Topic: International Affairs
Donald Thomas (Liberal Democrats, Centre to centre-left): My Lords, it is such a pleasure to follow the noble Lord, Lord Davies of Stamford, because I agree with every word that he has spoken I commend the European Union Committee for its hard work in producing the report. However, it is unfortunate that it has been seized upon by the Brexiteers, who have affirmed that the United Kingdom could flounce out of the negotiations without a deal and avoid any obligations or commitments which had been incurred. "We don’t have to pay a penny", trumpeted the Daily Mail I have read the evidence given to the committee by the three legal experts, who were not agreed. Because they were not agreed, the opinion of the legal adviser, Mr Harvey, was sought. No one is an expert in this field, because Article 50 has never before been tested. I find his opinion tortuous and I cannot agree with his view on the effect on our liabilities to the EU should no deal be forthcoming. His view is reflected in paragraph 133 of the report in these terms: "The rule in Article 70(1)(b) of the Vienna Convention only applies to withdrawal from a treaty which does not have its own withdrawal procedures" Then it says in brackets, "(‘unless the treaty otherwise provides’)." The report continues: "Manifestly, the TEU does, in the form of Article 50. Article 50 therefore takes precedence over Article 70(1)(b) of the Vienna Convention" I quite fail to understand what that paragraph means Paragraph 2 of Article 70 states, "a State … withdraws from a multilateral treaty, paragraph 1 applies in the relations between that State and each of the other parties to the treaty" Paragraph 1 deals with the rights, obligations and legal situation of the parties prior to the termination. That is what it is about. It says that, "Unless the treaty otherwise provides", those rights and liabilities are not affected. It is very simple and plain language. As the noble Lord has pointed out, Article 50 does not otherwise provide—it is quite silent on the existing rights and obligations at the date of withdrawal from the treaty. It follows that any other state that is a party to the treaty can enforce those rights and obligations in law. That is the legal side On the practical side, we are about to have placed before us the great repeal Bill, which is to take the whole of the acquis communautaire into domestic law—to make EU law domestic law. If the United Kingdom were sued for a money sum, would we actually raise a defence that these obligations arose only under EU law, which we have just taken and made part of our own domestic law? Would we deny the jurisdiction of our own High Court of Justice? If we did that, would we then refuse arbitration where, by agreement, any questions of international law could be determined? Would we force another state to raise an issue in the International Court of Justice and spend years locked in conflict with Europe, simply ignoring the rights of other states in Europe that would obviously be affected by our position The view that our rights and obligations would come to an end the moment we fall out of the EU would have strange results. For example, money has already been allocated to Wales from the European structural funds to improve the port facilities at Holyhead. Let us assume that the money is paid upfront. The First Minister of Wales might consider, "Should we spend this money on Holyhead, or wouldn’t it be rather nicer to spend it on a marina in Cardiff Bay? We might attract Sir Philip Green and yachts of that sort and improve the character of the place where we work. We have no obligations to the EU: they have given us the money; we do not have to pay it back, and can use it as we like. They cannot sue us". That would be nonsense, would it not Assets are another important issue. I happen to have been a member of the Reform Club for some 45 years, which is about one-quarter of the time that that distinguished club has been in existence—I stayed there last night, as it happens. If I were to cease to be a member tomorrow, I would not go to the secretary or the trustees and say, "Look, I have paid my subscription for 45 years and think I am entitled to a share of the value of this club. I demand my part of it". That would be nonsense. But at the same time, I would not expect to have to contribute to the liabilities for the pensions of the staff. We did not form the European Union; we became a party to it. We came late to the feast, although many of us were campaigning to become members long before 1972. We were members of a club, and we cannot say that we are entitled to a portion of its facilities wherever they may happen to be This country has entered into commitments. The multiannual financial framework for 2014-20 was negotiated and agreed in 2013. There was a problem at that time because the European Parliament was concerned that countries were not paying their dues. There were shortfalls which jeopardised projects such as the Erasmus programme and the Social Fund, which ran out of funds in 2013, and it was said that those countries had to pay up during that year. Since we negotiated and became a party to that multiannual financial framework, the annual budgets of the EU have been calculated on the basis that the agreed funding in the MFF was available to carry out those programmes commenced before 2020 within the budget We are currently in the period of the 2017 budget, which committed members of the EU to contribute €157 billion, out of which payments of €134 billion would be made. I take it—I ask the question directly of the Minister—that, notwithstanding Brexit, the United Kingdom is engaged in the discussions and negotiations for the 2018 budget within the MFF. I assume further that we will still be a party to the discussions on what the MFF 2019 and 2020 budgets will be. We must continue to participate I am concerned from a Welsh point of view, obviously, because Wales is a net recipient of EU funding. It receives funds from the European Agricultural Guarantee Fund, the European Regional Development Fund and the European Social Fund. Indeed, some 60 projects have already been approved, with liabilities that organisations have taken on and put into their programmes which will extend way beyond 2020. Surely those liabilities will have to be met from funds from this country. It is true that the Treasury has issued a guarantee that these matters will be paid up until 2020, but what happens after then when the programmes run on The problems that the report highlights and makes it necessary to discuss are complex and difficult. However, we must properly address them and not get involved in the suggestion that we can just walk away from Europe, hold our noses and not have anything more to do with it.