Brixit divorce bill set to rise to £40billion: As government makes new plan ahead of submit

Ministers are preparingThis is double the

figure previously offered by Theresa May.

In September, the Prime Minister offered to hand over £20billion to the EU during a two-year transition to a new relationship after Brexit in 2019.

But EU leaders, who are demanding at least £53billion, have rejected the offer as too small. Ministers on a key Cabinet sub-committee are due to hold talks behind closed doors today on how much to offer the EU, and what to demand in return.

Boris Johnson and David Davis have both warned the Prime Minister against making a significant new offer unless it is accompanied by guarantees on the type of trade deal the UK can expect from Brussels.

But the Chancellor yesterday indicated he was backing a bigger payment, saying there was a ‘very high value’ in having a close trade relationship with the EU after Brexit. to offer the EU up to £40billion in divorce payments, Philip Hammond has suggested – as ministers prepare for a crunch meeting on the issue today.

The Chancellor said the Government would make a fresh offer to Brussels ahead of an EU summit next month when leaders are due to decide whether to begin post-Brexit trade talks with the UK.

Mr Hammond put no figure on the new offer, but Brussels sources have suggested the EU will not consider a payment of less than £40billion.

Talking up the prospect of a new offer, he told the BBC’s Andrew Marr Show: ‘I do think we’re at something of a turning point. We’ve had a difficult year.

‘We’re now I think on the brink of making some serious movement forward in our negotiations with the European Union, and starting to unlock that logjam so that people can start to see clarity about the future.’

The EU’s chief negotiator, Michel Barnier, set a deadline of this Friday for a new offer, although this has now been extended for a further week. France and Germany, which will have to plug the financial holes left by the UK’s EU departure, have both indicated they will delay the opening of trade talks until they receive an improved offer.

Ministers are desperate to begin talks on trade and a two-year transition deal at next month’s EU summit in Brussels. Mr Hammond yesterday suggested ministers would act to ensure a deal, saying: ‘We will make our proposals to the EU in time for the Council, I am sure about that.’

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