Theresa May wins support for bigger bill to break Brexit deadlock

Theresa May won ministerial backing on Monday for her plan to break the deadlock in Brexit talks next month, but Eurosceptic colleagues warned that any increase in the UK’s “divorce bill” offer to at least €40bn must be conditional on it securing a transition deal and a good trade agreement with the EU.

The prime minister is expected to make her improved financial offer at the last possible moment ahead of next month’s EU summit in Brussels and only after she is sure that it will unlock stalled Brexit negotiations.

British officials have identified December 8 as the moment for finalising the offer, which is intended to close the gap between the €20bn Mrs May has already put on the table and the €60bn divorce payment sought by the EU.

Ministers have variously speculated that the UK promise to honour outstanding EU commitments might imply a bill of €40bn to €50bn. Mrs May will not put a precise figure on the offer but instead give greater detail on how it would be calculated.

The issue was discussed on Monday in Downing Street by the 10-member cabinet subcommittee on Brexit negotiations. One minister said: “There is consensus behind the prime minister’s position — for now.”

Mrs May told colleagues she was seeking assurances from EU leaders that the move on the divorce bill would be received favourably. She wants to give the leaders just enough time to prepare a positive response at the European Council in Brussels on December 14-15.

Britain wants the European Council to declare that “sufficient progress” has been made in the first phase of Brexit talks and to open the door to a transition deal with the EU and talks on a trade agreement.

Mrs May hinted during a visit to Birmingham at the delicate choreography involved in getting both sides to “jump together” at the Brussels summit.

“What I want to see is developing that deep and special partnership with the EU for the future and I want to see us moving together because, as I’ve always said, a deal that’s good for the UK will be good for the European Union,” she said.

Political uncertainty in Germany has complicated the picture, although British officials insisted privately that Berlin should be able to unblock Brexit talks next month regardless of chancellor Angela Merkel’s own position.

Mrs May will meet European Council president Donald Tusk on Friday to discuss the progress of British cabinet discussions on the divorce bill and also the continuing debate over the future of the Irish border after Brexit.

Despite pressure from Michel Barnier, the EU chief negotiator, to deliver a new British proposal on the divorce bill by the end of this week, Mrs May wants to hold off on a final offer until December 8, giving the other side less time to demand more.

Boris Johnson, the foreign secretary, was among those at the Brexit cabinet subcommittee who said that any increased financial offer should be contingent on the EU agreeing to transition talks next month and to finalising a favourable trade deal by next year.

“It has to be something for something,” said one ally of Mr Johnson. “This can’t be unconditional money.”

Mr Johnson and other ministers said at the cabinet subcommittee that Britain should have a clearer idea of the “end state” of UK-EU relations before committing more money.

Eurosceptic ministers said Britain must be ready to walk out of talks next year if the EU offers a bad deal on trade. Under that scenario the British offer on the divorce bill would fall on the principle that “nothing is agreed until everything is agreed”.

Government officials said that only a small part of the cabinet subcommittee discussions were on the money question. It is thought the biggest topic was Britain’s future relationship with the EU.

Although many pro-Brexit Tory MPs have privately conceded that Britain will have to pay more to secure a transition deal and a trade accord, some Eurosceptics argued that the UK should not be paying to leave the bloc.

“One pound is too much,” said Tory MP Peter Bone. “There is no legal obligation whatsoever for us to pay any money. We are net contributors, over £200bn over the years to the European Union superstate. If anyone should get any money from this divorce, it’s us. The idea we would pay £38bn is absurd.”

Meanwhile in Brussels, Mr Barnier warned that if Britain wanted a trade deal that was more ambitious than the recent EU-Canada agreement — which focuses on goods, not services — it would have to stick closely to EU rules.

He said the issue of regulatory divergence between the UK and the EU would be “decisive because it will shape the discussion on our future partnership and shape also the conditions for ratification of that partnership in many national parliaments”.

Mr Barnier added: “If we manage to negotiate an orderly withdrawal, fully respecting the integrity of the single market, and establish a level playing field, there is every reason for our future partnership to be ambitious.”

Michael Roth, Germany’s Europe minister, said the other 27 EU member states were still waiting for the UK to “get their skates on”.

“We are interested in starting the second phase of negotiations,” he added. “But right now I see no chance that we can really send a signal at the European Council in December that these negotiations can start.”