Prominent Tory MP and veteran eurosceptic Sir Bill Cash suggested ministers “bear in mind” a post-war deal that saw Germany’s debt halved amid likely demands Britain pay a multi-billion pound EU exit fee.
Brussels’ chief Brexit negotiator Michel Barnier is ready to hit the Prime Minister with a eye-watering departure bill as soon as Article 50 divorce talks are triggered next Wednesday – with it believed the EU could demand the UK pay as much as £50billion.
But Sir Bill this afternoon advised Brexit minister David Jones to contemplate the 1953 London Debt Agreement should his department be faced with such a bill.
Signed by countries across the world the 1953 deal provided West Germany with relief on its massive post-war debts – including money owed from First World War reparations and post-1945 loans provided by the US.
The agreement, which followed months of talks, slashed West Germany’s debts in half and also tied repayments to the health of the country’s economy.
Sir Bill, speaking as chair of the House of Commons’ European Scrutiny Committee, urged Mr Jones to consider how Britain has been a “net contributor for many decades” to the EU budget and so “our accumulated liabilities are offset by the extent to which we’ve made these massive contributions”.
He added: “Perhaps also to bear in mind that back in 1953 there was a thing called the London Debt Agreement, where Germany – for all its malfeasance during the Second World War and its unprovoked aggression – found that in 1953, in circumstances which were quite remarkable, that we remitted one half of all German debt.
“Therefore if you compare that situation with what it is now and given Germany’s extremely dominant role in the EU at the moment it might be worth tactfully – not one of my strongest points – but tactfully reminding people that there is a realistic position here that we really don’t owe anything to the EU whether it’s legal or political.”
In response Mr Jones noted Sir Bill’s admission over the sensitivity of the subject and replied: “I’m not entirely sure how tactful one can be when one is mentioning the London Debt Agreement. But nevertheless, clearly there are a whole range of issues.”
In 1953, in circumstances which were quite remarkable, we remitted one half of all German debt
The issue of the London Debt Agreement has previously been raised by debt-laden Greece, another signatory to the post-war deal, amid its battles with the EU over bailout payments.
Earlier in today’s meeting of the European Scrutiny Committee, Tory MP Jacob Rees-Mogg asked Mr Jones whether a recent House of Lords report – which found Britain has no legal obligation to pay an EU exit fee – would form “an important part of your opening negotiating strategy”.
The peers’ report revealed legal evidence shows if the UK walks away from the EU at the end of two-year Article 50 talks without a divorce agreement “all EU law will cease to apply and the UK would not have an obligation to make any financial contribution at all”.
Mr Jones hinted the Government could take a hardline approach to a demand for a Brexit fee at the beginning of exit talks.
He said: “Certainly as a starting point it (the report) is very helpful.”
Sir Tim Barrow, the UK’s ambassador to the EU, suggested the remaining 27 EU member states would “have an interest in other legal opinions” on the question of Britain’s exit bill.