Johnson backs down as May seals new Tory truce over Brexit billions
Theresa May last night made peace with Boris Johnson by securing a Cabinet truce over Britain's future payments to the EU.
The deal involves paying substantial sums to the EU until at least 2020, but no further payments after Britain's transition period.
It is a compromise between Boris Johnson's position and that of Philip Hammond, the UK chancellor, and is expected to be part of the British prime minister's Brexit speech in Florence on Friday.
It came after a frenzied day on which the foreign secretary's allies suggested he would be prepared to resign from the Cabinet over Mrs May's Brexit strategy, only for him to apparently pull back from the brink after the prime minister brokered a truce.
Allies of Mr Johnson had raised the prospect that he was prepared to resign when they said he "could not live with" any deal that involved paying billions of pounds to the EU after the transition period.
In response, Mrs May confirmed to him that Friday's speech would make clear that the era of large payments would stop when the transition period ended, and is understood to have tweaked her speech to address some of the points he raised in his 4,200-word Brexit essay in last Saturday's 'Daily Telegraph'.
Mr Johnson responded by announcing he would not be resigning, while Mrs May said he was doing a "good job".
Mrs May has also made sure the speech satisfies her Europhile chancellor, by offering to continue making full payments to the EU during a two-year transition period.
Mr Hammond favours a lengthy "status quo" transition to make it easier for businesses to adjust, and he is also understood to have had input into the speech.
As a result Mr Johnson, Mr Hammond and David Davis, the Brexit secretary, will now accompany Mrs May to Florence in a show of unity for a speech that is intended to break the deadlock over Brexit talks.
It is understood Mrs May's speech will repeat recent broad assurances to the EU that the UK is not seeking to become a Singapore-style low-regulation tax haven.
The payment of around £10bn (€11.2bn) a year during the transition period would not settle all of the UK's accounts in Brussels' eyes, but would be a gesture of Britain's commitment to pay its dues, with the intention that the final amount would be negotiated alongside a trade deal.
The prime minister will chair a Cabinet meeting tomorrow at which she will unveil the contents of Friday's speech, which Downing Street has billed as a "significant" move forward in setting out her vision of Britain's post-Brexit relationship with the EU.
As she and Mr Johnson prepared for a day of meetings at the United Nations in New York yesterday morning, it appeared that the foreign secretary had been frozen out by Mrs May: despite staying in the same hotel, Downing Street said they were not due to meet.
But relations thawed after Mrs May made it clear to Mr Johnson that she had no intention of pursuing a "Swiss-style" arrangement with the EU that would have involved paying up to €4.5bn per year to access the single market, as well as yoking the UK to vast amounts of EU regulation. Mr Johnson had told Mrs May that he was prepared to drop his opposition to payments to the EU during a transition period.
This allowed Mrs May to broker a truce between the Eurosceptics in the Cabinet, led by Mr Johnson and Michael Gove, and the Europhiles, led by Mr Hammond and Amber Rudd, that will involve multi-billion euro payments continuing during the transition period but not beyond.
As peace broke out between Mr Johnson and Mrs May, the foreign secretary announced he would go with her to the Commonwealth reception after all.
There was evidence that Mr Johnson may have been forced to back down after facing a grassroots revolt within his party. (© Daily Telegraph, London)