What are the areas of contention in the first stage of the Brexit talks? There are two big stumbling blocks: the so-called “divorce bill” and the rights of the three million citizens of the European Union living in Britain and of the British diaspora living in the EU27.
The “divorce bill” relates to the question of how much the United Kingdom owes to the bloc. It relates to programmes and budgets agreed on and in some cases begun before the UK voted to leave. As I’ve written before, the divorce analogy doesn’t really work: it’s much more like leaving a dinner with friends before the bill has arrived. If you have ordered dessert, and it has already been whipped up, you still need to leave enough to cover your share even if you are skipping out on the final course.
The United Kingdom has agreed in principle that it will pay its outstanding commitments to the European Union. What is keeping the sides apart is a different account of how much the United Kingdom owes, not whether or not the United Kingdom owes money.
There are good arguments on both sides. Obviously, the United Kingdom should pay for budgets it already agreed to while still in the EU. But, as British budgetary contributions have paid for assets – buildings, software, and so on – the United Kingdom has a strong case that some of the cost of those assets should be deducted from the final total. And, with the British government seeking a Brexit deal that means the UK continues to participate in EU-wide research and security programmes, there is a case, too, that the cost of the UK’s exit bill should take that into account. (If the United Kingdom is still paying into and participating in Europol, the EU-wide security programme, then those payments should be deducted from the Brexit bill.)
But the difficulty is that the United Kingdom hasn’t laid out what it sees as a reasonable calculation and expectation for the bill, which is one reason why negotiations on this area aren’t proceeding.
That speaks to the wider problem of the government’s Brexit policy. Although there are a few exceptions, most Leave-backing Conservative MPs don’t really have a plan for after Brexit: leaving is a destination, not a staging post to anything else. It is the end of the process, when of course the most important questions around Britain’s Brexit deal hinge on the shape and size of the British economy and the direction of British policy afterwards.
It was summed up by Michael Gove’s one-word answer to Mary Creagh’s question about how the United Kingdom would regulate the chemicals industry after Brexit. This is an industry that is Britain’s largest manufacturing export sector – it exports around £50bn a year – adds more than £15bn to the British economy and is of increasing importance to UK plc.