Conservative leader Theresa May is coming under fire from various directions over the ongoing Brexit talks – from Brussels who want her to sort out the divorce bill to those within her own party not to pay a penny. While others argue to pay in full for the sake of good future relations.
Prime Minister May is expected to reveal more details of her thinking ahead of the European Union summit on December 14-15 and thoughts in Westminster is that she will up her initial offer of £17.9 billion (€20bn).
However Downing Street described talk that she could double her initial offer as mere “speculation”.
Mr Davis, the Brexit Secretary, has now cautioned the Prime Minister to keep her cards close to her chest and keep some of the cash in reserve as a way to secure a good trade deal with the EU when that phase of the Brexit talks begin.
Mr Davis is said to view the question of cash as a key bargaining tool in the ongoing talks.
One colleague told the Financial Times: “DD has a specific negotiating strategy. Some money must be held back.”
The Brexit Secretary, speaking at a trade conference in Berlin last night, said Britain wanted to negotiate a comprehensive trade deal that incorporated goods, agriculture and services, that incorporated key financial services.
He said: “We will be a third country partner like no other. Much closer than Canada, much bigger than Norway, and uniquely integrated on everything from energy networks to services.”
The European Commission’s chief Brexit negotiator Michel Barnier has made it clear Britain’s divorce settlement is only a payment of past commitments and not a negotiating tool to secure a trade deal.
The bloc has also warned the UK if it leaves the single market and refuses to comply with the bloc’s stance on its “four freedoms – in particular on free movement of its citizens – then the UK can only hope for a similar trade deal to that struck with Canada.
The EU-Canada deal only concerned goods rather than services but Mr Davis wants to incorporate financial services into its deal with the bloc, securing the future prosperity of the City of London.