EU in ‘threat to hold back £5 billion’ as deadline set

Claims UK’s rebate could be withheld over ‘divorce bill’

The European Union is reportedly threatening to hold back Britain’s final £5 billion rebate payment from Brussels as part of negotiations over the so-called Brexit “divorce bill”.

European Council president Donald Tusk has set a deadline of the start of December for Britain to make further movement on the financial settlement in order to unlock trade talks.

But according to the Telegraph, Brussels negotiators have not provided clarity on the final rebate payment for 2018, which is due to come a year in arrears after Britain’s scheduled exit from the EU on March 29 2019. The newspaper quotes “British officials” who think the rebate, first secured by Margaret Thatcher in 1984, should be “netted off” the final divorce bill.

Both the Government and the EU did not comment on the report last night.

Reports, dismissed as speculation by Downing Street, suggested Mrs May could offer a further £20bn in payments, which would bring to around £38bn the total sum Britain is prepared to pay to settle its liabilities – well short of the 60bn euro (£53bn) sought by Brussels.

After talks with the Prime Minister in Sweden, Mr Tusk said the EU has completed the internal work necessary to give the green light for talks on trade and transition to begin at the next European Council summit in Brussels on December 14-15.

But he said that “much more progress” was needed from the UK on the divorce bill and Northern Irish border, two of the three key issues in withdrawal talks, in order to break the deadlock which has prevented the move to the second phase of negotiations which the UK is seeking.

He said he had told Mrs May that “this progress needs to happen at the beginning of December at the latest”.

Mrs May told reporters as she left Gothenburg: “We are agreed that good progress has been made but there is more to be done, that we should move forwards together towards that point where sufficient progress can be declared and we can look ahead to what I have already said I want to see as a deep and comprehensive and special partnership between the UK and the remaining 27 members of the EU.”

Mrs May is anxious to secure the agreement of EU leaders to open discussions on Britain’s future relations with the bloc – including a free trade deal – when they meet next month in Brussels.

Picture: AP. Prime Minister Theresa May speaks to French President Emmanuel Macron as they walk on a pier at an EU summit in Gothenburg.