The UK is prepared to pay up to €40 billion as part of a deal to leave the European Union, the Sunday Telegraph newspaper reported, citing three unnamed sources familiar with Britain’s negotiating strategy.
However, The Guardian quoted a Downing Street source as saying that the figure was “inaccurate speculation” and that such an amount would be unacceptable to both the government and Brexit voters.
The bill the UK will have to settle after it leaves the bloc on 29 March 2019 is one of the most contentious issues in the ongoing divorce talks between Britain and the EU.
EU officials have already made clear that Britain would have to honour all its financial commitments under the EU’s long-term budget, which covers the 2014-2020 period, even after leaving the Union.
The UK is currently the second largest net contributor to the EU budget, after Germany.
The EU has floated a figure of €60bn and wants significant progress on settling Britain’s liabilities before talks start on issues such as future trading arrangements.
A source close to the issue recently told EURACTIV that UK advisers were reportedly very keen to know the legal basis of the EU’s demand. “The UK legal advisers say they have lots of advice suggesting the country does not need to pay the €60bn to the EU,” the source said on condition of unanimity.
“We are trying to tell [the UK government] not to politicise the discussion as this is a legal case and an obligation and not a Brexit fine as some tend to present it,” the same source added.
The government department responsible for Brexit talks declined to comment on the article. So far, Britain has given no official indication of how much it would be willing to pay.
The newspaper said British officials were likely to offer to pay €10bn a year for three years after leaving the EU in March 2019, then finalise the total alongside detailed trade talks.
Payments would only be made as part of a deal that included a trade agreement, the newspaper added.
“We know (the EU’s) position is €60bn, but the actual bottom line is €50bn. Ours is closer to €30bn but the actual landing zone is €40bn, even if the public and politicians are not all there yet,” the newspaper quoted one “senior Whitehall source” as saying.
Whitehall is the London district where most British government departments and ministers are based.
A second Whitehall source said Britain’s bottom line was “€30bn to €40bn ” and a third source said Prime Minister Theresa May was willing to pay “north of €30bn “, the Sunday Telegraph reported.
Britain’s Brexit minister David Davis said on 20 July that Britain would honor its obligations to the EU but declined to confirm that Brexit would require net payments.
British foreign secretary Boris Johnson, a leading Brexit advocate, said last month the EU could “go whistle” if it made “extortionate” demands for payment.
Pro-Brexit campaign group Leave Means Leave said speculation about a divorce bill was “unhelpful”.
“With the EU Brexit negotiations, nothing is agreed until everything is agreed,” said the group’s co-chair Richard Tice.
“The focus should be on accelerating talks with the aim of concluding them at the end of 2017. This would enable businesses to adapt during the 15 months leading to March 2019.”
The Telegraph said advisers in May’s office had warned bosses in London’s financial sector that Britain walking out of Brexit talks was a “real possibility” if the impasse over the bill cannot be broken.
Former European Commission head Romano Prodi told the Observer newspaper said it would be economic “suicide” for Britain to fail to reach a compromise on Brexit, and called on the EU to preserve as much trade with Britain as possible to avoid damaging both sides.
If Britain cannot conclude an exit deal, trade relations would be governed by World Trade Organisation rules, which would allow both parties to impose tariffs and customs checks and leave many other issues unsettled.
Last week the Bank of England said Brexit uncertainty was weighing on the economy. Finance minister Philip Hammond wants to avoid unsettling businesses further.
The EU has also wants agreement by October on rights of EU citizens already in Britain, and on border controls between the Irish Republic and the British province of Northern Ireland, before trade and other issues are discussed.