David Davis has hinted that Britain may raise its cash offer to the EU beyond £20bn in the next few weeks in order to break the deadlock in Brexit negotiations.
Speaking to an audience in Berlin on Thursday night, the Brexit Secretary revealed the UK “will come to” EU demands to increase its financial settlement before a crunch European Council summit takes place on 14 December.
Downing Street earlier dismissed as “speculation” reports that Theresa May is ready to offer a further £20bn to pave the way for trade talks.
Asked whether Britain will have to move on its original £20bn offer by the end of the year, Mr Davis said: “I’m not going to get into what’s going to happen on that.
“We’ll come to that before the December council.”
It comes as Justice Secretary David Lidington also suggested the Government could retreat on its plan to formally write a date for Brexit – 29 March 2019 – into UK law.
In his speech in the German capital, Mr Davis also admitted that divorce talks had been “quite tense” before the Prime Minister used her Florence speech to commit to covering the Brexit blackhole in the EU budget until 2020.
Answering questions about the Brexit bill at the economic summit, Mr Davis said: “We’re leaving, so our aim is for this budget round, the round that goes up to 2020, nobody will have to pay more… nobody will receive less.
“That’s the basic position. But that’s not all of it and we’ve said over and above that there will be other commitments and we’re going through that.
“We’re going through and establishing what the EU believes about these commitments – what size they are, what the basis of their understanding is – and then we’ll make some decisions, political decisions later on.”
The EU has demanded “sufficient progress” on the UK’s financial settlement before divorce talks can move onto negotiations about a future EU-UK trading relationship.
The Brexit Secretary also used his Berlin speech to warn the EU that “putting politics above prosperity is never a smart choice” as he pushed his case for “a deep and comprehensive free trade agreement”.
He called for Brexit talks to end in a EU-UK agreement of greater scope than the recent trade deal the bloc signed with Canada, despite reports EU chief negotiator Michel Barnier has drawn up a framework for trade talks in which a Canada-style deal is the only option.
Mr Davis tried to reassure his audience about Britain’s commitment to a partnership with the EU beyond Brexit, as he admitted “since the referendum last year, some in the EU have had their doubts about what kind of country we are”.
The Brexit Secretary also gave the strongest confirmation yet that Britain will abide by the rulings of the European Court of Justice (ECJ) during a planned two-year transition period after 2019.
He said such an arrangement would “mean access to the UK and European markets would continue on current terms, keeping both the rights of an EU member and the obligations of one, such as the role of the ECJ”.
Mr Davis’ comments are likely to rile some Leave supporters within the Conservative Party.
Asked if the Brexit Secretary’s comments on continued ECJ jurisdiction during a transition period concerned him, prominent Brexiteer Jacob Rees-Mogg told Sky News: “Yes, if we are still subject to the ECJ we have not left the EU, so it is not transition but continued membership.”
Responding to the Brexit Secretary’s speech, Labour MP Peter Kyle, a supporter of pro-EU Open Britain campaign, said: “Satire is dead. This Government is taking Britain out of the world’s largest free trade area, which buys half of our exports, because of their failure to stand up to backbench Brextremists.
“It is absurd that they should be lecturing others about putting politics ahead of prosperity.”