May under pressure to not raise offer to EU
THERESA MAY is facing increased opposition from her own MPs not to increase the UK’s financial offer to the EU amid fresh warnings that British banks will face barriers to trade after Brexit.
Tory backbenchers yesterday condemned reports that the Prime Minister is in favour of doubling the so-called divorce bill to £40bn as “bananas” as they called for any extra money to be spent on public services. Their comments came as the EU’s chief negotiator Michel Barnier insisted that the trading bloc wants to offer its “most ambitious freetrade agreement” yet but warned that “freedom” comes at a price.
Speaking in Brussels, he indicated Britain will cease to benefit from the work of European agencies once it leaves, while financial firms risk losing their passporting rights.
Mrs May was expected to discuss increasing the UK’s financial offer at a meeting of a special Cabinet sub-committee yesterday afternoon. The proposal forms part of efforts to break the deadlock over trade negotiations ahead of a crucial meeting of EU leaders next month.
Last week the EU Council President Donald Tusk gave Britain two weeks to clarify its financial obligations to the trading bloc or risk its calls to move on to the second phase of talks being rejected.
It has previously been estimated that the cost of covering outstanding payments could be around £20bn, but the Cabinet if reportedly in favour of increasing this to £40bn. Speaking during a trip to Birmingham yesterday, Mrs May repeated the assurances set out in her Florence speech that the UK “will honour our
commitments”. However, Tory backbenchers lined up to criticise the £40bn figure, with the former Education Minister Robert Halfon leading calls for any additional money to be channelled into under-pressure health and housing sectors.
“The idea of giving the EU £40bn is horrendous when we have a huge public sector deficit,” he told the Evening Standard.
“Most people would go completely bananas if we suddenly found £40bn for the European Union when they are worried about money for their local hospital, college or local housing.
“If there is really £40bn behind the back of the Treasury sofa it should be spent on cutting the cost of living and building housing for people on low incomes.”
The veteran Eurosceptic John Redwood put the figure closer to £30bn, stating that he did not see “any legal base” for paying more.
Speaking to The Yorkshire Post, the Shipley MP Philip Davies said he “completely agreed” with Mr Halfon, adding: “In a time of austerity it would be completely unacceptable to pay the EU a penny more than is legally due.”
In a speech to the Centre for European Reform think-tank, Mr Barnier repeated his calls for the UK to “come forward with proposals” for how to avoid a hard border between Northern Ireland and the Republic. He also stressed that it remained his priority to “settle the accounts accurately” before moving on to trade talks.
He went on to say that while UK-based financial services companies may be able to operate in the EU post-Brexit on the basis of “equivalent” regulations, they will “lose their European passport”.
He also rejected suggestions that the UK will continue to be able to benefit from the work of European agencies, arguing that “freedom implies responsibility for building new UK administrative capacity”.
The warning came ahead of today’s debate on the EU Withdrawal Bill, which is set to last eight hours.
The Prime Minister is reportedly facing a rebellion over an amendment enshrining the date of Brexit in law, with pro-Remain MPs arguing it could tie the UK’s hands in negotiations.
Several Ministers appeared to suggest the Government is willing to make a concession, telling MPs that they are “listening” to their concerns.
But Downing Street indicated on Friday that Mrs May is unwilling to back down.