Friday 20 September 2019

David Davis to travel to Paris to jump-start EU withdrawal discussions

David Davis (left) and Michel Barnier
David Davis (left) and Michel Barnier

David Davis will travel to Paris on Monday for Brexit talks days after French President Emmanuel Macron suggested Britain would need to up its divorce payment offer to unlock trade negotiations.

The Brexit Secretary will have dinner with French foreign minister Jean-Yves Le Drian in the UK's latest attempt to jump-start withdrawal talks with the European Union.

France is seen to be taking one of the EU's most hardline views on the exit bill after Mr Macron suggested at this week's European Council that it could top 40 billion euro (£36 billion).

The president said that earlier indications the UK could offer around 20 billion euro (£18 billion) to ensure its EU partners were not left out of pocket due to Brexit did not go halfway to what was required.

The Prime Minister repeatedly dodged questions at the European Council summit in Brussels over how much the UK is ready to pay, insisting the size of a "full and final settlement" will not emerge until agreement is reached on all aspects of Brexit.

But she did not deny suggestions it could be "many more billions" than the 20 billion euro indicated in her speech in Florence last month.

A Department for Exiting the European Union (DExEU) source confirmed Mr Davis's plans, which will be seen as a fresh attempt to unblock negotiations which took a small step forward at the Council summit.

An agreement to begin scoping work on trade may reassure City firms which had suggested they might have to move functions and staff to the continent if no progress was made by Christmas.

But it was accompanied by clear demands from EU leaders for Britain to make more concessions on the divorce bill so they can green light trade negotiations at the next Council summit in mid-December.

In a sign of the likely internal Tory battles ahead over the money, senior Brexiteer Bernard Jenkin has warned the Prime Minister she should not sign up to a deal at any price, while pro-EU colleague Anna Soubry said it would be better to halt Britain's exit entirely than leave with no agreement.

Those pushing for a "no deal" exit have been cautioned by former World Trade Organisation deputy director general Roderick Abbott that it would be a would be a big step down that would hit Britain harder than the EU.

Reports suggest the Government may use the coming weeks to step up preparations for a no deal Brexit in order to force the EU's hand in negotiations by showing the UK is ready to leave without a trade agreement, in the hope it could lead to a more favourable outcome including fewer concessions on the exit payment.

But discussing a "no deal" Brexit with the UK trading on WTO rules, Mr Abbott told BBC Radio 4's Today programme: "What has happened is, you are out of a preferential relationship with the EU, including all of the regulations of the single market which you are inside.

"And on the tariffs level you are losing all of your preferential access to the EU and to all of the countries which the EU has trade deals with, so that's quite a big step down."

Asked if erecting tariffs on EU goods and services would favour the UK because it would take in more money than it pays out, Mr Abbott replied: "Yes, and on the other side, if you're talking cost, your exports might actually drop quite substantially, so your revenue from that is falling.

"I think that the tariff argument is in the favour of the EU because they are selling more to the UK than in any other direction, but as a proportion of their total trade around the world it's quite small.

"Whereas, the proportion of our trade to the EU is 45%."

Meanwhile, former head of the Civil Service, Lord O'Donnell, warned that banks would leave the UK if there was no deal.

He said Catalonia's current bid for separation from Spain provided an example of what will happen.

Banks and other firms have already confirmed their intentions to move their headquarters out of the region amid a stand-off with the Spanish government.

Lord O'Donnell told the programme: "They are voting on independence and you can see companies moving their headquarters out, banks moving away from Catalonia, because if they were to go independent they would leave the EU with no deal and most of their trade is obviously with the rest of Spain.

"That will be in doubt."

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