Parliamentary scrutiny and approval of the Withdrawal Agreement and negotiations on a future relationship Contents

2The Political Declaration

The content of the Political Declaration

47.Article 50 states that the Withdrawal Agreement will set out the arrangements for the UK’s departure from the EU, taking account of the framework for the future relationship, which will be the subject of the Political Declaration. As DExEU Minister Suella Braverman told us, the Withdrawal Agreement is “to be seen against the context of our future framework agreement. […] Our departure is pursuant to a Withdrawal Agreement and the framework of our future relationship. That is not an “or”; it is an “and”, so those two things go together and they are part of a package.”52

48.The Political Declaration will not be a treaty. The Secretary of State told us that it would be in effect a “statement by the Council on a whole series of decisions as to what the future economic partnership will look like.”53 He expects it to contain “quite a lot” of detail including not only a free trade agreement and mutual recognition, but also a whole series of other important areas such as aviation, data and nuclear materials. He told us that there are important players in the EU27, naming Angela Merkel, who have “made it very plain that they want the substantive future partnership to be very detailed”54.

49.In oral evidence in January, we heard from the Secretary of State that it was important that material aspects of the future relationship are not left to be negotiated during the transition / implementation period. He argued:

It would be unwise, in my view, apart from that it practically does not meet the requirements of a transition period, to get sucked into doing a negotiation that is substantive or major during the transition period itself. Why? The balance of power in the negotiation alters and the aim then, on the part of the Commission, will be to spin out the negotiation.55

50.To achieve this, he told us that the detail could be added to the future framework between the parliamentary vote and exit day:

Bear in mind, you have left out a six-month lacuna in that, between October of this year and March of 2019. It does not inevitably mean it will spill over […] There is no reason why we cannot turn a very detailed substantive arrangement into a treaty before the end of the Article 50 period.56

Robin Walker MP, Parliamentary Under-Secretary of State in the Department for Exiting the European Union, also told us that making progress on the future relationship before the UK enters the transition / implementation period was in the interests of both the UK and the EU. He said the Government will be making this case in the White Paper due after the June Council.57

51.The legal basis for the negotiations on converting the Political Declaration on the future relationship into a legally binding treaty will be Article 218 of the TFEU, which applies to relations with third countries. Consequently, the negotiations on a future relationship can only be concluded and ratified after the UK has left the EU. The Secretary of State has claimed that it will be possible to turn the Political Declaration into a treaty between the autumn of this year and exit day. While some text might be negotiated, we believe it is unlikely, given the scale and complexity of the issues which need to be addressed and the process of reaching agreement, that a future relationship treaty could be negotiated, even in draft, before exit day.

52.In a report for the Scottish Parliament, Dr Tobias Lock from the University of Edinburgh suggested that the framework for the future relationship should “pave the way towards achieving it” but noted “it is difficult to conceive of it being used as the basis for a future relationship treaty.” He explains that the Article 50 process could not be used to circumvent the specific procedures for negotiating agreements with third countries (which is what the UK will become on 30 March 2019) set out in Article 218.58 He added that it would be “problematic if the level of detail were such as to place the agreement outside the competence conferred on the EU by Article 50 (2) TEU.”59

53.It was noted by Sir Jonathan Faull that a “mutually acceptable arrangement for the customs relationship” between the UK and the EU would be key to adding more detail to the future framework. He said that once that relationship is understood, that will simplify the Irish land border and Dover/Calais and provide for more detail on our regulatory relationship with the EU.60 He suggested that the time it will take to turn the Political Declaration into a fully-fledged agreement will be determined predominantly by the duration of the ratification process as elements of the agreement will require national ratification, involving the agreement of national and regional parliaments in some countries.61

The legal status of the Political Declaration

54.The EU has previously produced a number of ‘political declarations’ across a variety of policy fields, including migration policy62 and environmental policy.63 Agata Gostynska-Jakubowska raised with us the example of the declaration the EU concluded with New Zealand in 2017 ahead of trade negotiations. A document of 14 pages, it mentions numerous areas of co-operation, from global and regional security to movement of people, development policy, fisheries, transport, and people-to-people contact, but it remains very general. She described it as “more an intention of both parties to say, “We share common values, this is the intention we have and these are the goals we want to achieve”,” adding that “it will be more binding when it comes to means than when it comes to results.”64 Guy Verhofstadt, Brexit Coordinator and Chair of the Brexit Steering Group in the European Parliament, told us that, in his “personal opinion”, the best way to secure a legally binding Political Declaration would be to make it an annex to the Withdrawal Agreement. He said that would make the Political Declaration part of the whole Withdrawal Agreement. He added, however, that he was not saying this was the position of the European Commission.”65

55.The House of Commons Library explains that a ‘political declaration’ is not a formal EU law instrument under the EU Treaties; it is understood that political declarations are not legally binding but they do carry political weight.66 The Secretary of State compared the Political Declaration to the agreements on the Article 50 negotiations reached in December and March:

They are not legally binding but we view them as completely politically binding. That is pretty forceful. I remember I made this point in December and people got into a terrible uproar, saying, “Oh, he is saying it is not legally binding”. It was not, as the Commission confirmed. That does not mean we do not view it as binding. It is binding.67

56.Jill Barrett from Queen Mary University Law School agreed that the Political Declaration would be politically but not legally binding, and not binding in international law as the Withdrawal Agreement treaty will be. She explained that there would be no legal liability if changes were subsequently made to the Political Declaration:

there would be no legal liability if the UK did change its mind on elements in the Political Declaration. With nonbinding political commitments of this kind, it is always understood that, if the Government have a change of policy or even if there is a change of Administration, the new Administration may not be bound to that text. There would certainly not be any legal liability if it came back at a later date to the EU and said, “Look, circumstances have changed and we would now like to negotiate something different in the future relations treaty”.68

57.The Secretary of State acknowledged the uncertainty that this creates for Members of Parliament who must decide whether to approve the Withdrawal Agreement, which would become a legally binding treaty when ratified, based on a Political Declaration for a future framework which will not be ratified until after the UK leaves the EU. He told us that the Political Declaration will need to be substantive so he can show the UK Parliament what it is getting in exchange for voting for a financial settlement of £35 billion to £39 billion.69

The Financial Settlement

58.In her statement to the House following the agreement of the Joint Report on 11 December 2017, the Prime Minister said that the £35 billion to £39 billion “offer” was conditional on the agreement on the future relationship and, if we do not agree the future relationship, then “the offer is off the table.”70

59.The Comptroller and Auditor General told the Treasury Committee in April following publication of his report on the financial settlement71:

In the autumn, leading up to a significant vote, there will be a draft of the withdrawal treaty and, at the same time, there will be what I will call a statement of intent. That is a sort of vision statement for how the rest of the relationship is intended to work. The idea is that the statement of future intentions is supposed to assist in approving the treaty. The treaty, once approved, will pass into law in time for us to leave the EU and then will become legally binding. Therefore, the payments would fall to be paid no matter what, under international law.72

He added that the payments were primarily in respect of the UK’s continuing membership of the EU during the transition / implementation period and do not relate directly to any future arrangements beyond the end of December 2020.73

60.Jill Barrett told us that, when the UK leaves the EU, the Withdrawal Agreement will become legally binding and the UK will be under an obligation, binding in international law, to pay a certain sum of money. Any subsequent change to that would require a renegotiation of the treaty.74 As Sir Jonathan Faull explained, it was the sequencing of the negotiations, proposed by the EU and signed up to by the UK, which placed the financial settlement as one of the three preliminary threshold issues that had to be addressed within the Withdrawal Agreement before progress could be made on the details of the future long-term relationship. He argued that the “nothing is agreed until everything is agreed” principle applied only to the Withdrawal Agreement. The negotiations on the future long-term relationship will be conducted under a different legal framework.75

61.While acknowledging that the Political Declaration will not be a legally binding document when Parliament votes in the autumn, DExEU Minister Suella Braverman told us that the “nothing is agreed until everything is agreed” principle applies to the whole package of our departure.76 She sought to reassure us that the financial settlement and the final future relationship agreement were explicitly linked through the statement in the December Joint Report that the Report was “agreed by the UK on the condition of an overall agreement under Article 50 on the UK’s withdrawal, taking into account the framework for the future relationship.”77 In other words, she explained, if the future relationship is not agreed by the end of the transition / implementation period, then the Withdrawal Agreement can be renegotiated and payments not made.78 However, there must be some doubt about the achievability of such a renegotiation.

62.Mrs Braverman also drew our attention to the Article of Good Faith in the draft Withdrawal Agreement79 as a further insurance policy linking the UK’s financial commitments to the agreement of a future relationship:

A duty of good faith is contained in many legal documents. Let us use the joint report as the starting point. The settlement on the financial payment is to be set and put forward on a condition of an overall agreement relating to our future framework under Article 50. As I said before, the two are to be taken together. There is going to be continuous regard to how our future relationship is concluded. That includes the agreement on the implementation period. When it comes to the duty of good faith, it essentially means that the agreement in the joint report that the future framework is highly relevant to any payment that has been agreed is to be part of the discussions. That cannot be ignored.80

63.Jill Barrett told us that the UK could try to negotiate conditionality into the Withdrawal Agreement, for example with a clause that says “If this is agreed in the future we will pay that, and if this is not agreed in the future we will be paying less”, but that would have to be negotiated into the agreement now and agreed by the EU.81 It would also mean re-opening the chapter on the financial settlement in the draft Withdrawal Agreement which is coloured green, having been agreed in principle by both the Commission and the UK Government in March. We noted in our Fifth Report that the Secretary of State has left open the possibility that provisions could be added to link the financial settlement to the agreement of a future relationship. He told the Lords’ European Union Select Committee, “it depends on what conditionalities are in the legal text. At this stage I do not know what they are. Somewhere in there will be a reference to the future framework. It depends on what the text says.”82 We were told by Mrs Braverman that the Withdrawal Agreement, as currently drafted, does not contain conditionalities but she could not confirm whether it would when finalised.83

64.Notwithstanding the constraints of the Article 50 process, which sets out the procedures for a country exiting the EU rather than a country establishing a new relationship, the House of Commons will expect a high level of detail in the Political Declaration accompanying the Withdrawal Agreement if it is to be able to give its approval to both. We call on the Government to seek the inclusion of the Political Declaration as an annex to the Withdrawal Agreement in order to give its contents greater force.

65.The section on the financial settlement in the text of the draft Withdrawal Agreement published after the March Council was highlighted in green, indicating that it had been agreed in principle by both sides. The UK’s agreement to pay the financial settlement estimated at between £35 billion and £39 billion will be legally binding under international law once the Withdrawal Agreement is ratified by all parties concerned. The Withdrawal Agreement will be considered by the UK Parliament alongside a non-binding Political Declaration. A legally binding agreement on the UK’s future relationship can only be agreed once the UK is a third country. If the UK Government wishes to make the payment of the financial settlement conditional on reaching a binding agreement on the future relationship, it would need to secure the agreement of the EU27 to inserting text to this effect in the Withdrawal Agreement. We note that the Government has not yet secured a clause in the Withdrawal Agreement linking the financial settlement to the satisfactory conclusion of negotiations on the framework for the future relationship. We call on the Government to confirm whether the inclusion of such a clause is one of its negotiating objectives.

57 Q1842 and Q1775

58 The Withdrawal Agreement can be concluded (ratified) by a (super) qualified majority in the Council whilst the agreement(s) on the future relationship will likely require unanimity in the Council and (if it is a “mixed agreement”) the individual ratification by each Member State

62 See, for example, Valletta Summit, 11–12 November 2015, Political Declaration

63 See, for example, Valletta 18 May 2017, Political Declaration on Clean Energy for the EU Islands

69 Q1458 and Q1525

70 HC Deb, Brexit Negotiations, 11 December 2017, Vol 633, Col 30

71 National Audit Office, Exiting the EU: The Financial Settlement, 20 April 2018

72 Oral evidence to Treasury Committee, The UK’s economic relationship with the European Union, 24 April 2018, HC 473, Q522

73 Ibid

78 Q1798 [Mrs Braverman]

82 Oral evidence taken before the House of Lords European Union Committee, Scrutiny of Brexit negotiations, 1 May 2018, Q4

83 Q1796 and Q1863

Published: 28 June 2018