The Daily Express has learnt that senior Government figures have privately briefed key Brexit groups that the Prime Minister will insist that they move on to trade talks before any final divorce bill can be agreed.
The revelation came as ministers played down claims emanating from the EU that the Government has privately committed to paying 45 to 55 billion euros (£40 billion to £49 billion).
According to one report from Brussels, the UK Government has accepted that it has 90 billion euros of liabilities and will pay around half – 45 billion euros (£40 billion).
Mrs May’s hand has been strengthened by a new Bank of England report that reveals that the UK banking system will be able to survive the shock of no deal with the EU.
She is set to meet European Commission Jean-Claude Juncker on Monday ahead of the crucial European Council summit on 14 December facing a demand that she pledges to a specific amount before talks on trade can begin.
‘No divorce bill’ May gets tough on EU and REJECTS €55billion demand
There is nothing to fear from leaving the EU without a deal, even the perpetually gloomy Bank of England is now admitting it
If the European Council, made up of heads of government, refuses to move the talks on to trade it is widely expected that Mrs May will end the negotiations and prepare for operating under World Trade Organisation (WTO) rules.
While the Prime Minister has agreed to pay up to then of the current EU budget cycle in 2021, estimated to be a net loss of £28 billion to the UK in the two years after Brexit in 2019, it is understood that she has cabinet backing to go further to get a trade deal.
A Westminster source linked with Brexit campaign told the Daily Express: “We don’t believe this figure of 45 billion euros or more because we have had clear assurances that no money will be put on the table, meaning that the Government will not commit to a final figure.”
The move has come at a sensitive time with a pro-Brexit minister briefing the Express last week that Mrs May is facing resignations from the Government if she pushes ahead with even £40 billion without a proper trade deal.
And last night the Government roundly dismissed the reports of a deal on a divorce bill from Brussels.
A BoE report revealed that the UK will survive the shock of a no deal exit from the EU
A Downing Street source said that negotiations are “ongoing”.
Meanwhile, another senior government source “strongly advised against following that figure” of £40 billion to £49 billion.
A Department for Exiting the EU spokesman said: “Intensive talks between the UK and the European Commission continue to take place in Brussels this week as we seek to reach an agreement.”
Another senior source dismissed the reports as “wrong”.
For talks to progress on to trade the EU has demanded that the UK needs to resolve the divorce bill issue as well as give greater clarity on EU citizens rights and the Ireland, Northern Ireland border.
Mrs May is set to meet European Commission President Jean Claude Juncker on Monday
Meanwhile in Brussels a spokesman for the EU’s chief Brexit negotiator Michel Barnier said: “We would not have any comment on it.”
Movement was expected yesterday on the EU position with Mr Barnier in Germany holding talks with the beleaguered German Chancellor Angela Merkel and her finance minister Peter Altmaier.
Scepticism over reports from Brussels has strengthened over recent months with many of the briefings being denied by the British government and apparently aimed at undermining the UK negotiating position.
According to Economists for Free Trade, a “no deal” where Britain goes on to WTO rules would boost the UK economy by £135 billion a year.
And last night a Bank of England report appeared to shatter Project Fear claims that no deal would be a disaster for the UK.
Jacob Rees Mogg claimed there is ‘nothing to fear from leaving the EU without a deal’
The Bank’s stress tests showed the UK’s banking system could cope with an extreme economic stress scenario, equivalent to the worst possible outcome of the UK’s departure from the EU.
All seven of the lenders tested were given a clean bill of health and will not have to bolster their financial strength for the first time since the annual health check on the sector was launched in 2014.
Barclays and the Royal Bank of Scotland (RBS) emerged as the weakest of the seven lenders tested and only passed thanks to action they have taken over the year to boost their balance sheets.
The Bank put seven of the biggest lenders through their paces – Lloyds Banking Group, Barclays, RBS, HSBC, Santander, Nationwide Building Society and Standard Chartered.
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In its bi-annual Financial Stability Report, the Bank found the lenders were strong enough to “continue to support the real economy through a disorderly Brexit”.
Tory MEP David Campbell Bannerman, a member of the European Parliament’s trade committee and Brexit steering group, said: “The wheels seem to be falling off Project Fear.
“Not only have we not lost 500,000 jobs but have the lowest unemployment since 1975, now we find UK banks will be sound financially even with WTO rules.”
Tory MP Jacob Rees Mogg said: “There is nothing to fear from leaving the EU without a deal, even the perpetually gloomy Bank of England is now admitting it.”