Now two of the government’s most senior figures have hinted the UK will continue EU contributions after Brexit
Signs are increasing that the UK may continue making contributions to the EU after Brexit, after two of the government's most senior figures refused to rule it out.
Brexit secretary David Davis said the UK “would consider” contributions aiding the UK in securing the best possible Single Market access.
His comments were later echoed by chancellor Philip Hammond who said it was appropriate not to rule out writing cheques to the EU.
The pound rose sharply on Davis' comments, breaking $1.26, having opened the day at $1.2506.
It reached intraday highs of $1.2650 – a rise of over one per cent – before settling in late afternoon trading in the UK at $1.2618.
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And Tory backbenchers have rowed in behind the government's approach.
Arch Brexiteer and Treasury Committee member Steve Baker said: “Paying for market access would not be free trade, but the government is right not to speculatively rule ideas in or out, however left-field those ideas may be.”
International Trade Committee member James Cleverly added that because the UK has been a net contributor to the EU budget, membership of the Single Market has always come with a bill.
“It's going to have to be a negotiation, there's something we want and something we are willing to give. We want something which looks and feels as close to membership as possible and the EU will want something in return for that.
“If [Davis] said we are not not going to make any contribution he would be painting himself into a ridiculous corner.”
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Similarly, John Redwood said the Brexit secretary was simply keeping his options open.
It's complete nonsense, though. They will overwhelmingly want tariff-free trading and there should be no need to offer them anything for something that is more in their interest than it is in ours.
European experts said the comments from Davis and Hammond reflect the need for the UK to change diplomatic "mood music", and note that EEA members like Norway contribute towards development funds in Eastern Europe, adding the UK could pay into projects like European research partnership Horizon 2020, in lieu of directly supporting the EU budget.
“There's also the aid budget – we could use that more effectively to work for European interests,” said Open Europe acting director Stephen Booth.
You can make a hard-headed case that it's in Britain's interests to pay nothing that, but these are neighbours.
“And if the UK is going to have a positive relationship with the EU and it's neighbours it has to be about more than just commerce. It is after all in the UK's interest to support Eastern European development, for example.”
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Centre for European Reform director Charles Grant said it could also help buy the UK some goodwill in its negotiations, and help it secure a preferential deal, in line with mentions of “Canada Plus”, seen in the notes of an MP's aide leaving Downing Street this week.
Grant added that attitudes to the UK have cooled in recent weeks, with European officials reacting particularly poorly to comments from foreign secretary Boris Johnson on Italy's need to sell prosecco and rubbishing suggestions of freedom of movement as a founding principle of the EU.
“That's just mood music. But in diplomacy, mood music matters. It's not the end of the world, but it has definitely not got us off to a good start,” Grant said.