Theresa May and key Brexit ministers to discuss 'divorce bill' offer to EU

Theresa May and key Cabinet ministers who oversee Brexit negotiations are expected to discuss Britain's offer to the European Union for the so-called "divorce bill" Brussels insists is needed to unlock trade talks.

The Cabinet Exit and Trade (Strategy and Negotiations) sub-committee will meet on Monday after Chancellor Philip Hammond said Britain will make proposals to the EU in the next three-and-a-half weeks on the settlement of outstanding financial commitments.

European Council president Donald Tusk has set a deadline of the start of next month for Britain to make further movement on the divorce bill and Irish border for EU leaders at the December 14-15 European Council summit to declare "sufficient progress" has been made on withdrawal issues for talks on a future trade relationship to begin.

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Downing Street refused to discuss the agenda for Monday's meeting or reports that the sub-committee could agree an offer. But it is understood that some ministers think the divorce bill is likely to be discussed.

On Sunday, Mr Hammond told BBC One's Andrew Marr Show: "We are now I think on the brink of making some serious movement forward in our negotiations with the European Union, and starting to unblock that logjam so that people can start to see clarity about the future."

Reports, dismissed as speculation by Number 10, have suggested Mrs May could be prepared to offer a further £20 billion in payments, which would bring the total sum Britain is prepared to pay to settle its liabilities to around £38 billion - well short of the 60 billion euro (£53 billion) sought by Brussels.

Mr Hammond said he was sure the UK would bring forward proposals in time for the December summit, making clear that the Government wants to agree soon a post-Brexit implementation period to allow businesses time to transition to new trading terms.

"The Prime Minister is clear that we will meet our obligations to the European Union and as you know, we want to make progress in the discussions at the December Council at the European Union and the Europeans have asked us for more clarity on what we mean by meeting our obligations," Mr Hammond said.

"We will make our proposals to the European Union in time for the Council, I am sure about that."

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Mr Hammond promised Britain would honour its debts but also "negotiate hard" on the various aspects of the financial settlement.

He underlined the urgent need to secure a post-Brexit implementation period in the next few months, acknowledging it is a "wasting asset" that will have less value the later it is agreed.

The Chancellor said it would be "much less useful" in a year's time as businesses will have started making alternative arrangements and Government agencies will have begun putting in place contingency plans ahead of the expected Brexit date on March 29 2019.

"It is a wasting asset and that's why it's in everybody's interest that we get the implementation agreement as soon as possible," he said.

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Tory Brexiteer Jacob Rees-Mogg urged the Government not to fall into a "trap" on the divorce bill.

"They need our money," he told BBC Sunday Politics.

"If we don't pay any money for the final 21 months of the multi-annual financial framework, the EU has about £20 billion - £18-20 billion gap in its finances.

"It has no legal authority to borrow. And that means either it's insolvent, or the Germans and others have to pay more. Or possibly some receive less. So our negotiating position on money is very strong."

The ministers who make up the subcommittee that will meet on Monday are: Mrs May, Mr Hammond, First Secretary of State Damian Green, Home Secretary Amber Rudd, Foreign Secretary Boris Johnson, Brexit Secretary David Davis, International Trade Secretary Liam Fox, Business Secretary Greg Clark, Environment Secretary Michael Gove and Defence Secretary Gavin Williamson.