We must get good deal for paying Brexit bill

Our Europe Editor reports today that a deal has been reached between the Government and EU negotiators on the so-called Brexit divorce payment. This will settle, for the time being at least, one of the three matters that Brussels insisted upon resolving before agreeing to wider talks about Europe’s future relationship with the UK. The other two – the rights of EU citizens remaining in Britain and the border between the Republic of Ireland and Northern Ireland – are still under discussion. Progress will need to be made on both of these before the Council of Ministers meet in Brussels on December 14.

While the UK has always acknowledged that a payment would have to be made to meet this country’s obligations on leaving, ministers have been reluctant to put any figure on it. Even now, a complex formula to calculate the final sum will allow the Government to fudge it. At the very least, however, we are looking to hand over £40 billion both in settlement of liabilities and to ensure the EU does not suffer a budget shock before its next financial round starts in 2020.

This is a lot of money and justifying it will require a concerted Cabinet effort to explain to voters why it is necessary. It can be sold as part of an overall package to leave the EU provided future trading arrangements are satisfactory.

The Government adheres to the concept that nothing is agreed until everything is agreed; so it is theoretically possible that if the trade talks collapse, or never start, we would take some or all of the money off the table. However, the EU sees no connection between the two and regards any exit payment as without prejudice to any future arrangements. None the less, that is something to be sorted out when we get there. What is needed now is to move on from the current stalemate. If Mrs May goes to Brussels next month and comes away with nothing then there will need to be a serious reconsideration of the UK’S negotiating strategy, including an assessment of whether it is even worth continuing with the process.

That, however, would raise questions over Britain’s readiness to honour its treaty obligations and could trigger a political crisis at home. What is needed is a powerful narrative to remind voters why Brexit is worth it. The process was never going to be easy or without controversy. But the Government is committed to it and, led by Mrs May, needs to marshal all its forces in support.