Theresa Angela PHOTO

Theresa May admits for the first time that Brexit negotiations have been in ‘difficulty’

Theresa May has admitted for the first time that Brexit negotiations have hit “difficulty” as she beseeched European leaders to give her a deal she can sell to the British people.

The Prime Minister explicitly conceded last night that talks were in trouble ahead of her key intervention in Florence two weeks ago, prompting her to try and get negotiations back on track.

She told Angela Merkel, Emmanuel Macron and other EU leaders that there is now the “urgent” need for progress with the threat of the UK crashing out of the EU without a deal looming.

Speaking on Thursday evening at a working dinner with other heads of government in Brussels, Ms May said that at the end of the summer she “recognised the difficulty the process was in”.

“I took stock, listened to what the people in the UK were saying, and what my friends and partners in Europe were saying, and I made a step forward,” she said.

The Prime Minister, who is attending a meeting of the European Council, told leaders that the Florence speech was designed to break the deadlock she had identified and called for a new “joint effort and endeavour”.

“There is increasingly a sense that we must work together to get to an outcome we can stand behind and defend to our people,” she said, adding that when the 27 remaining member states convene tomorrow to discuss Brexit in private “the clear and urgent imperative must be that the dynamic you create enables us to move forward together”.

The PM and world leaders dined on gnocchi and pheasant supreme at the dinner, followed by fresh pineapple.

European Commission chief negotiator Michel Barnier has repeatedly said he is “worried” about “deadlock” in negotiations, but the line from the UK government has always been significantly more optimistic, stressing “concrete progress”.

The PM’s intervention comes as the European Council appears set to refuse to allow the UK to move to trade and future relationship talks – which it has said can only start once “sufficient progress” has been made on settling the divorce bill, Northern Ireland border, and EU citizens’ rights.

The 27 remaining EU leaders will meet tomorrow to discuss Brexit without Ms May, whose address to dinner was not followed by any discussion or debate.

They are expected to tell Britain to come back in December once more progress has been made for another assessment of whether it is ready for trade talks.

Senior UK government officials also admitted that the prime minister was “working against a difficult political backdrop” at home – an apparent reference to Tory MPs who were pushing her for a no deal.

Arriving at the summit on Thursday Angela Merkel said she believed there were “encouraging” signs that sufficient progress could be made in December. Ms May said the summit was a time to take stock of the progress that had been made in talks so far.

Dutch prime minister Mark Rutte however told reporters in Brussels that Ms May had to “come up with more clarity on what she means by ‘other commitments’ in her Florence speech”.

“I phoned her last week, and tried to encourage her to do that and so far she hasn‘t,” he said.

The Prime Minister’s spokesperson told journalists in Brussels: “The Florence speech intended to create momentum and we achieved that. In all our talks with EU leaders they have been responsive and we hope that will continue.”

Other issues such as forest fires and migration have dominated the first day of European Council discussions, with Britain’s departure not even getting a mention in the first press conference between Jean-Claude Juncker and Donald Tusk after hours of talks.

Latest Brexit News: Does the UK owe the EU money?

Legal and political considerations are obviously intertwined in the debate about a financial settlement as the UK prepares to leave the EU. But it is possible to separate them in some respects.

Article 70 of the Vienna Convention on the Law of Treaties states that the termination of a treaty… “does not affect the right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination”.

In other words, as the EU would argue, your obligations only come to an end on the day of the termination of an international treaty – the “get-out clause” doesn’t apply to obligations made before you leave.

But – and it is a big but – there is a crucial caveat. Those terms apply under the Vienna Convention “unless the treaty otherwise provides or the parties otherwise agree”.

And the treaty in question – the Treaty on European Union (TEU) – does provide otherwise, in the form of the famous Article 50. So Article 50 of the TEU trumps Article 70 of the Vienna Convention.

Now, Article 50 doesn’t say anything about money or rights or obligations. So, in this interpretation, the UK would not be required to pay anything if there were to be no withdrawal agreement, because the treaty itself says nothing about any such payments.

Article 50 says “the treaties shall cease to apply to the state in question” either when a withdrawal agreement takes effect, or two years after the Article 50 process has been triggered by the member state that intends to leave. This is the ticking clock.

An in-depth report on this debate, issued by the House of Lords, acknowledges that there are “competing interpretations” on what the UK should pay, but it reaches the conclusion that, because the European treaties do not say anything on the matter, there would be no enforceable obligation to make the UK pay any financial contribution at all.

The Lords has taken the view that Article 50 is in effect a “guillotine” and the UK would be free to walk away without any responsibilities should agreement not be reached. But, and we’ll come back to this, it warns that there would be a price to pay.

It is also important to emphasise that these are largely uncharted legal waters and some kind of legal challenge at an international level would probably be made. The EU itself could not bring a case against the UK at the International Court of Justice (ICJ) in The Hague, because it is not a sovereign state.

But the remaining 27 member states – acting either individually or collectively – could in theory appeal to the ICJ, or to another relevant international tribunal. They would want their money back.

And this is where we have to get back to politics. No deal on money would mean “no deal” on any of the other issues being negotiated under Article 50, such as the rights of citizens and the future of the border between Northern Ireland and the Irish Republic.

Walking away with no agreement would also do significant reputational damage to the UK – if we can’t trust you on past obligations, EU officials would argue, why should we trust you on future ones?

That is why the British government says it wants a deal and it accepts that it does have financial obligations to meet. The trouble is there’s no agreement so far on precisely what those obligations are.

In conclusion, it is easy to say – in isolation – that the UK has no legal obligation to pay anything at all. But the reality is that such a provocative move would cause far more problems than it would solve.

Most leading Brexiteers acknowledge that, and accept (with varying degrees of reluctance) that the UK should pay something as a gesture of goodwill. On the EU side it is seen as rather more than that – it is a prerequisite for any deal to succeed.

Theresa PHOTO

May and Davis to travel to Brussels for urgent Brexit talks

Prime minister and Brexit secretary to meet Jean-Claude Juncker and Michel Barnier in attempt to break stalemate.

Theresa May and David Davis will make a surprise visit to Brussels for a private dinner with the European commission chief, Jean-Claude Juncker, and the EU’s top Brexit negotiator, Michel Barnier, in a diplomacy blitz before a crucial summit this week.

May and Davis will visit Juncker and Barnier in the Belgian capital on Monday evening, where they are expected to make the case for EU leaders to agree to move on negotiations, to pave the way for discussions of Britain’s future relationship with the EU.

Though Downing Street insisted the dinner had long been in May’s diary, EU sources suggested it may have been more last-minute, but were not able to provide confirmation.

The EU, led by Germany and France, has sought to harden its position towards the prospect of trade talks beginning before Christmas. The UK has been unable to break the EU wall of unity that insists the talks about future relations cannot start until talks on the terms of departure are settled.

A European commission source said Juncker would have a working dinner with the prime minister, along with Davis and Barnier, on Monday to “discuss European and geopolitical issues of common interest and prepare” for the European council summit starting on Thursday. They would also discuss the long-term agenda for the G7 and G20.

Monday will be the first time May and Juncker have dined since the pair’s catastrophic meeting in April. Juncker is reported to have said May was “deluded” about the progress of Brexit, and the prime minister in turn accused Brussels of making deliberately timed attacks to interfere with the UK general election.

May is said to be in the midst of a whirlwind round of “telephone diplomacy” with EU leaders before the summit, starting with a conversation with the German chancellor, Angela Merkel, on Sunday.

Documents leaked last week suggested that European leaders, on the bidding of the European council president, Donald Tusk, would present an agreed position on a transition period and a trade deal in December, should the UK make further concessions.

That promise to the UK was expected to be made at the European council summit this week. However, at a meeting of key diplomats on Friday evening, EU member states discussed weakening the language in the draft statement about their intentions in December, to give themselves greater flexibility in how they respond when they assess the rate of progress.

Multiple EU sources said the member states were concerned that they might be boxing themselves in, and that they should avoid promising any guidelines on how the EU foresees a trade deal and transition period working. “How detailed do we want to be about what we will do in December?” one said. “Some feel that maybe we should be more general.”

The EU is both unsure about the reliability of the UK as a negotiating partner, during a time when May’s position in Downing Street is in doubt, and wary of looking too eager for trade talks, when major concessions in the financial settlement are still being sought. “We can’t control what happens in the UK,” said one EU diplomat. “We can only control what we do here.”

Other UK cabinet ministers have also been wooing EU leaders before the summit. The foreign secretary, Boris Johnson, met eight eastern European foreign ministers at Chevening on Sunday in an attempt to break the Brexit deadlock, the first time since the negotiations started that the Foreign Office has gathered such a collection of allies in one place.

In the phone call with Merkel, May’s spokesman said she stressed the importance of progress in the negotiations, in a week when her Conservative backbenchers have been pushing her to start making detailed preparations for a no-deal scenario.

The prime minister is expected to make more calls to other EU leaders in the coming days but a No 10 source made it clear May was not planning on threatening to withdraw from talks, despite some of the pressure from more hardline Eurosceptics.

On Sunday, the former Brexit minister David Jones said Britain should be prepared to suspend negotiations at this week’s European council meeting until the EU was prepared to negotiate further on the financial settlement and begin talks on future trade terms.

“Until such time as you talk to us we will assume you are not really serious and we will of course have to prepare for life outside the EU in which we will be trading with you on World Trade Organization terms,” Jones told BBC Radio 4’s The World This Weekend.

Such a strategy is likely to meet fierce opposition from MPs on both sides of the house who oppose a hard Brexit. On Sunday the shadow chancellor, John McDonnell, said his party was talking to Tory MPs to block any prospect of a no-deal Brexit.

However, his comments sparked concern from Labour and Conservative backbenchers who believe Tory MPs are not likely to be won over to support the amendment if it can be construed as being orchestrated by McDonnell or the Labour frontbench.

McDonnell’s comments came as a cross-party group of MPs, including several former Conservative ministers, revealed plans that would give parliament the ability to veto a “bad deal” or “no deal” outcome, using amendments to the forthcoming EU withdrawal bill.

The shadow chancellor said Labour was not prepared to consider the prospect of leaving the EU without a negotiated settlement. “I’m not willing to countenance that. I don’t think there is a majority in parliament for no deal,” he told the BBC’s Andrew Marr Show.

“I think there are enough sensible people in the House of Commons to say: ‘This cannot happen – we cannot damage our country in this way.’”

Asked if Labour would work with Conservative MPs who were also concerned about leaving with no deal, McDonnell said: “There are discussions going right the way across the house.”

One Labour MP called the comments “totally counterproductive” to cross-party collaboration between MPs from both sides lobbying for a soft Brexit. “The Tories don’t want to do anything perceived to help Corbyn; this kind of chat puts them off challenging the ministerial frontbench,” the source said.

On Monday, leading Conservative MPs from both sides of the Brexit divide played down the likelihood of a no-deal scenario.

Kenneth Clarke, the former chancellor, who is among the cross-party group of MPs seeking to give parliament the power to veto any no-deal departure, said very few people were actively seeking this.

“I do think we’ve got to make it clear, only a handful of hard rightwing Eurosceptics really think no deal is desirable,” he told BBC Radio 4’s Today programme.

“A majority will, I think, wish to look in the round at whatever this crisis scenario is that has arisen at the time.”

Clarke said the aim of the proposed amendments to the EU withdrawal bill was not to reverse Brexit: “I’ve accepted that the vast majority of parliamentarians think they’re bound by this referendum and therefore we’re going to leave.”

The leading Conservative Eurosceptic MP John Redwood also said he did not expect a no-deal scenario, but insisted the UK could “do just fine” if that happened.

Redwood told the Today programme the government must prepare for the possibility of there being no deal.

“But I suspect, at the 11th hour, the EU will want a free trade deal with us, because they won’t want tariffs on all their exports to us. But if we look as if we’re weak it’s going to delay getting any sensible offer out of them.”

Redwood stressed he would prefer a deal to happen. “Of course, I think that if we had tariff-free trade with no new barriers that would be better than if the EU insist on putting some tariffs and barriers in the way.

“The reason I’m fairly relaxed about them doing that is there are limits to how much damage they can do because we’re both members of the World Trade Organization and we know we can trade perfectly successfully on world trade terms, because that’s what we do at the moment with the whole of the rest of the world.”

UK-US trade deal could be ‘big and exciting’

The US President tweeted that a bilateral trade agreement with the UK after it leaves the EU in 2019 could be “very big and exciting” for jobs.

Mr Trump, who backed Brexit, also took a swipe at the EU accusing it of a “very protectionist” stance to the US.

The US President, whose officials are meeting British counterparts this week, has been accused of protectionist rhetoric by his political opponents.

The UK’s International Trade Secretary Liam Fox is currently in Washington discussing the potential for a UK-US trade deal after the UK’s withdrawal from the EU in March 2019. No deal can be signed until after then.

Mr Trump has said he would like to see a speedy deal although free trade agreements typically take many years to conclude and any agreement, which will have to be approved by Congress, is likely to involve hard negotiations over tariff and non tariff barriers in areas such as agriculture and automotive.

On Monday, Mr Fox published details of commercial ties between the UK and every congressional district in the US as a working party of officials met to discuss a future trade deal for the first time. Two-way trade between the two countries already totals £150bn.

Mr Fox is also discussing other issues, including the continuation of existing trade and investment accords, with trade secretary Wilbur Ross and the US Trade Representative, Robert Lighthizer.

At a breakfast meeting for members of the House of Representatives, Mr Fox said his twin objectives were to provide certainty for foreign investors ahead of Brexit and to expand the volume and value of trade with the US.

“The EU itself estimates that 90% of global growth in the next decade will come from outside Europe, and I believe as the head of an international economic department that this is an exciting opportunity for the UK to work even more closely with our largest single trading partner the US,” he said.

Sir Vince Cable, the new leader of the UK parliament’s fourth largest party, the Liberal Democrats, said a US-UK trade deal could bring significant benefits – but he called on the government to guarantee parliament would get a vote on it first.

“Liam Fox and Boris Johnson must not be able to stitch up trade deals abroad and impose them on the country,” he said.

“It is parliament, not Liam Fox, that should be the final arbiter on whether to sacrifice our standards to strike a deal with Trump.”