Brexit deal ‘will favour EU on money’, says Davis

Brexit secretary David Davis leaves a Cabinet meeting at 10 Downing Street on Tuesday with defence secretary Michael Fallon © Getty

Brexit secretary David Davis has admitted that Britain’s exit deal with the EU “will probably favour the union on things like money”, as he gave the clearest glimpse yet of the government’s preferred end game for Brexit talks.

He told members of the House of Lords that the government wanted to wrap up Brexit talks by October 2018, in line with the EU’s timetable, giving parliament the time to vote on the deal and giving business “a bit more time to prepare”.

But he said that it was vital that Britain and the EU negotiate a political agreement on a future trade deal alongside the divorce agreement, ensuring that parliament could vote on the entire package.

“The withdrawal agreement will probably favour the union on things like money,” Mr Davis said, hinting that Britain will have to increase its opening €20bn offer on the divorce bill to move talks on to the next phase.

Mr Davis said the divorce agreement should include provisions for a transition deal lasting around two years but it should be taken as a package with the outline of a future trade deal. “We see the two as inseparable,” he told the House of Lords EU committee.

He said the agreement on the future relationship “will favour both sides”, suggesting that parliament would be more willing to swallow a difficult divorce settlement if it could see the benefits of a wider Brexit deal.

Mr Davis conceded that Brussels regards any prospect of a fully-formed trade deal being agreed by October 2018 as unrealistic and that EU chief negotiator Michel Barnier had spoken only of “scoping” a deal.

“I take the view that it should be an agreement,” Mr Davis said. “It could be a political agreement at that stage.” He added: “If not, how will the Commons or Lords decide if a deal is acceptable?”

Late on Tuesday, London and Brussels confirmed that the next round of Brexit talks would be held on November 9 and 10, ending uncertainty over when they would resume. In a joint statement by Mr Davis and Mr Barnier said an agenda would “be published in due course”.

Speaking to the Lords, Mr Davis declined to comment on reports that the government would bow to pressure from Tory rebels, led by former attorney-general Dominic Grieve, and concede that the final Brexit deal should be approved by parliament through primary legislation.

“We are going to listen carefully to the debate and listen to what people say,” he said.

Nine Conservative MPs have backed an amendment calling for the withdrawal deal with the EU to be approved by a statute. This would bring Westminster into line with the European Parliament, which will have a vote.

By conceding on the point, the UK government would be shifting power to parliament — enabling line-by-line scrutiny. So far it has only promised a simple yes-or-no vote on the whole deal, including both withdrawal terms and the future relationship. The amendment would also require the vote to take place before exit day.

But it is unclear what would happen if MPs refused to vote in favour of the withdrawal deal, or substantially amended it. One possibility is that the government would have to restart talks with Brussels; another is that Britain would leave the EU without a deal.

Meanwhile, Michael Gove, the prominent pro-Brexit campaigner, has been added to Theresa May’s inner cabinet overseeing exit negotiations and the crucial question of Britain’s future relationship with the EU.

The EU Exit and Trade (Strategy and Negotiations) subcommittee now has seven members, but former Remainers are still in the majority. Downing Street said Mr Gove was added because, as environment secretary, he represented the crucial farming sector.

Mrs May, Damian Green, Philip Hammond and Amber Rudd supported Britain’s continued EU membership in the 2016 referendum, while Mr Gove, Boris Johnson and Mr Davis supported Leave.

Additional reporting by Jim Brunsden in Brussels

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