May does deal to keep Johnson

BRITAIN: Prime Minister Theresa May has made peace with Foreign Secretary 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 Johnson’s position and that of Philip Hammond, the Chancellor, and is expected to be part of May’s Brexit speech in Florence at the end of the week.

It came after a frenzied day on which Johnson’s allies suggested he would be prepared to resign from the Cabinet over May’s Brexit strategy, only for him to apparently pull back from the brink after she brokered a truce.

Johnson allies had raised the prospect 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, May confirmed to him that her Brexit speech will make clear that the era of large payments will stop when the transition period ends, and is understood to have tweaked her speech to address some of the points he raised in a 4200-word Brexit essay published last weekend.

Johnson responded by announcing he would not be resigning, while May said he was doing a ‘‘good job’’.

May has also made sure the speech satisfies Hammond, by offering to continue making full payments to the EU during a twoyear transition period. Hammond favours a lengthy ‘‘status quo’’ transition to make it easier for businesses to adjust.

As a result Johnson, Hammond and David Davis, the Brexit Secretary, will now accompany May to Florence in a show of unity for a speech that is intended to break the deadlock over Brexit talks.

It is understood 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 about £10 billion (NZ$18.5b) 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.

EU sources said the EU would ‘‘not negotiate by speeches’’ and would be looking for concrete action on citizens’ rights and the financial settlement when Brexit negotiations restart next week.