Britain's Secretary of State for Exiting the European Union Dominic Raab, right, and EU chief Brexit negotiator Michel Barnier walk in the hallway prior to a meeting at EU headquarters in Brussels on Sept 6, 2018. (VIRGINIA MAYO / AP / POOL)
LONDON — Britain warned the European Union on Thursday that it will withhold billions of euros of a promised divorce payment if there is no Brexit deal.
Brexit Secretary Dominic Raab said the UK would pay "significantly, substantially" less than the already agreed-upon 39 billion pounds (US$51 billion) in the event no agreement is reached.
It's not a threat and it's not an ultimatum, it's a statement of fact
Dominic Raab, Brexit Secretary, Britain
The payment covers commitments the UK has made as a member of the bloc, including pension liabilities for EU staff and programs the UK has agreed to help fund over the next few years.
Raab told the BBC that Britain would recognize its "strict legal obligations" to the EU but would not make the full payment.
"It's not a threat and it's not an ultimatum, it's a statement of fact," he said.
Negotiations over future relations once Britain leaves the EU on March 29 have got bogged down amid divisions within Britain's Conservative government over the extent of the post-Brexit economic relationship with the bloc.
Raab said he remains confident the two sides will reach a deal. But the government is also stepping up preparations for leaving without an agreement.
Prime Minister Theresa May held a special Cabinet meeting Thursday focused on "no deal" preparations, and the government was publishing a sheaf of documents looking at the potential impact on various sectors of the economy.
The first batch of papers, released last month, said businesses could face red tape at the border, while customers could see higher credit card fees and patients could endure delays to medical treatment. There was even a warning that there could be a shortage of donor sperm if Britain crashes out of the 28-nation bloc without a deal.
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