Theresa May and key Cabinet ministers who oversee Brexit negotiations are expected to discuss Britain’s offer to the European Union for the so-called “divorce bill” Brussels insists is needed to unlock trade talks.
The Cabinet Exit and Trade (Strategy and Negotiations) sub-committee will meet on Monday after Chancellor Philip Hammond said Britain would make proposals to the EU in the next three and a half weeks on the settlement of outstanding financial commitments.
European Council president Donald Tusk has set a deadline of the start of next month for Britain to make further movement on the divorce bill and Irish border for EU leaders at summit in December to declare “sufficient progress” has been made on withdrawal issues for talks on a future trade relationship to begin.
The Prime Minister’s goal of making a breakthrough at the December 14-15 European Council meeting could be further complicated by the domestic political difficulties facing German Chancellor Angela Merkel.
Her attempts to put together a coalition have collapsed, raising the prospect of fresh elections in Germany and meaning that one of the European Union’s most significant players will be focused on her own position rather than being fully engaged in the Brexit process.
Downing Street has refused to discuss the agenda for Monday’s Brexit sub-committee meeting or reports that the minister could agree a financial offer to Brussels.
But it is understood that some ministers think the divorce bill is likely to be discussed.
On Sunday, Mr Hammond told BBC One’s Andrew Marr Show: “We are now I think on the brink of making some serious movement forward in our negotiations with the European Union, and starting to unblock that logjam so that people can start to see clarity about the future.”
Reports, dismissed as speculation by Number 10, have suggested Mrs May could be prepared to offer a further £20 billion in payments, which would bring the total sum Britain is prepared to pay to settle its liabilities to around £38 billion – well short of the 60 billion euro (£53 billion) sought by Brussels.
Mr Hammond said he was sure the UK would bring forward proposals in time for the December summit, making clear that the Government wants to agree soon a post-Brexit implementation period to allow businesses time to transition to new trading terms.
“The Prime Minister is clear that we will meet our obligations to the European Union and as you know, we want to make progress in the discussions at the December Council at the European Union and the Europeans have asked us for more clarity on what we mean by meeting our obligations,” Mr Hammond said.
“We will make our proposals to the European Union in time for the Council, I am sure about that.”
Mr Hammond promised Britain would honour its debts but also “negotiate hard” on the various aspects of the financial settlement.
He underlined the urgent need to secure a post-Brexit implementation period in the next few months, acknowledging it was a “wasting asset” that would have less value the later it was agreed.
The Chancellor said it would be “much less useful” in a year’s time as businesses would have started making alternative arrangements and Government agencies would have begun putting in place contingency plans ahead of the expected Brexit date on March 29 2019.
“It is a wasting asset and that’s why it’s in everybody’s interest that we get the implementation agreement as soon as possible,” he said.
Conservative former minister Robert Halfon said the public would go “bananas” if the UK offered £40 to £50 billion at a time of constraints on public spending.
He told BBC Radio 4’s Westminster Hour: “If we start saying that we’re going to give £40 to £50 billion to the EU I think the public will go bananas, absolutely spare.
“I voted Remain because I believe in alliances of democracies in an uncertain world, but we voted to leave, the public want to leave, and I cannot believe that the public would accept such a huge amount when we need money for our schools, our hospitals, our housing and many other things.”