May told to exploit Merkel crisis to reduce Brexit bill

May told to exploit Merkel crisis to reduce Brexit bill

Tories claim German instability strengthens PM’s hand in divorce talks

European Union UK politics Boris Johnson Conservative Party Donald Trump

Angela Merkel arriving for coalition talks in Berlin yesterday. Their collapse raised the chances of another German election

Senior Tory Brexiteers demanded last night that Theresa May exploit Angela Merkel’s political weakness and suspend plans to offer billions of pounds more to the European Union.

The prime minister’s allies said that she had bound her cabinet to Britain’s negotiating stance, including the offer of more money at a meeting before the European Council next month.

The German chancellor’s admission yesterday that she might be forced back to the polls had tipped Brexit negotiations into chaos, said Iain Duncan Smith, the former Conservative leader and a prominent Brexiteer. He urged Mrs May to “sit tight”.

Jacob Rees-Mogg, Tory MP for North East Somerset, said that it would be “foolish” to improve the offer at a time when Mrs Merkel needed to reassure German voters that they would not have to foot the bill if Britain left without an agreement.

Germany descended into political instability yesterday after weeks-long talks to form a coalition collapsed. Mrs Merkel said that she was ready for a rerun of the September election as most parties refused to return to negotiations.

Brexit-supporting ministers were said to be pressing Mrs May to use the turmoil of the EU’s most powerful nation to reduce Britain’s “divorce bill” before yesterday’s meeting of the cabinet sub-committee overseeing the negotiations.

It appears, however, that Mrs May has secured agreement from Boris Johnson, Michael Gove and other Leave-supporting cabinet figures to table an improved offer before the European Council meeting next month. The government will not put a figure on the total but it is likely to include commitments in the region of £20 billion on top of the £20 billion already acknowledged as owed in Mrs May’s Florence speech.

The Times understands that yesterday’s meeting ended in agreement on a broad negotiating strategy for the talks, including an improved financial offer. A government source suggested that Mr Johnson and Mr Gove had signed up to Mrs May’s plan. She is likely to put the offer forward informally when she meets Donald Tusk, president of the European Council, on Friday.

Any additional financial commitments would be conditional on the EU agreeing the broad outlines of its approach to an “ambitious” future trade deal with Britain, covering goods and services, it is understood. The source added that from a government per- spective the upheaval in Germany was irrelevant to the need to make progress in the Brexit negotiations next month. “It was a wide-ranging discussion on our approach of which money was only one small part,” the source said.

A Downing Street source added: “It remains our position that nothing’s agreed until everything’s agreed in negotiations with the EU.”

Mr Rees-Mogg, a leading pro-Brexit MP, said: “Approving a higher divorce bill at this stage would be foolish . . . As for Germany, its domestic political concerns make it less likely that it would want to risk the damage that could be done to its industry from the UK imposing tariffs on its exports.”

Mr Duncan Smith said: “When you look at what is going on in Europe the idea that out of that chaotic situation can come any sort of understanding is clearly not right, so we will have to sit tight.”

Separately Michel Barnier, the EU’s chief Brexit negotiator, warned the government that Europe would block a future trade deal if Britain tore up EU regulations on banking, industry, food and the environment.

He reminded ministers that any future trade agreement with the EU must be ratified in at least 38 national and regional parliaments, as well as by MEPs, before it could enter into force. In a stark warning to Tories and Brexit supporters, he said that Britain’s choice between President Trump’s vision of a deregulated economy or the “European model” of social and environmental protection would determine the shape of a final Brexit deal.

Francis Elliott y Oliver Wright

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