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“There may be specific European programmes in which we might want to participate and if so, it will be reasonable that we make a contribution. We will determine a fair settlement of the UK’s rights and obligations as a departing member state, in accordance with the law and in the spirit of the UK’s continuing partnership with the EU. The principle, however, is clear: the days of Britain making vast annual contributions to the European Union will end.”

With these words, the last Conservative Manifesto signalled the trade-off at the heart of the Brexit negotiation – at least from the Government’s point of view.  They want money; we want access – or, rather, the best possible terms of Single Market entry short of membership.  That cash consists of three main elements: the “specific programmes” above; the so-called “divorce settlement”, and payments to meet obligations we have previously entered into (hence the reference to “the spirit” of our continuing partnership).  In short, Theresa May was always willing to send billions to Brussels as part of a final settlement – just not billions that are part of “vast annual contributions”.

However, cleverly-constructed manifesto commitments are one thing; what voters think and feel is quite another.  There is no appetite to fork out billions of pounds to the EU.  Leave voters in particular are resistant to payments.  Most people do not read the small (or even large) print of manifestos, and the Prime Minister faces a potential voter backlash.

The key Cabinet Brexit committee meets today to discuss the Brexit negotiations – and the money.  We believe that a free trade deal with the EU is preferable to trading with it on WTO terms – though only if the deal offered is a good one, to use the phrase that May has used herself.  “Money for access” is an intrinsic part of any such agreement.  But there are three important riders.  First, there should be no question of payments being made before a deal is in place (other than those we are already obliged to discharge).  Second, there must be a formal commitment from the Government on the length of the transition period.  Finally, the Cabinet must have a clearer collective idea than it does now of what it wants to gain from a deal – and, in particular, how it intends to handle regulatory divergence.

As Henry Newman put it on this site, “the Government has not yet decided what sort of country we ought to be after Brexit. There is a range of possibilities – from Norway’s EEA/EFTA relationship to Switzerland’s web of bilateral agreements and to a Canada-type Free Trade Agreement. Where should the UK land on this spectrum from Norway/Switzerland to Canada? Or, in the jargon preferred by Whitehall – do we go for a “high access, low control” or “low access, high control”?”

Since the referendum was a vote to Take Back Control, the question answers itself, especially if we are adequately to control EU migration – a secondary but integral reason for Britain voting, with the largest number of votes ever cast for any proposition here, to leave the EU.

240 comments for: Brexit. Red lines for EU payments.

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