Theresa May's Brexit plans rejected as Junker says no trade talks before 'divorce' deal

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The president of the European Commission today attacked Theresa May’s handling of Brexit and ruled out vital trade talks until she gives ground on so-called “divorce” issues.

In a broadside, Jean-Claude Juncker said none of the Brexit papers published by the UK Government this month had been “satisfactory”.

“We need to be crystal-clear that we will commence no negotiations on the new relationship — particularly a new economic and trade relationship — between the UK and the EU before all these [separation] questions are resolved,” he said. 

The heavyweight intervention was timed as UK officials began a detailed challenge to Brussels’ demands for a multi-billion-pound cash settlement as part of separation talks. 

Mrs May also came under pressure from pro-EU Tories, who said the UK’s lack of clarity on key issues was turning the negotiations into a “farce” and endangering a trade deal. 

Juncker said none of the Brexit papers published by the UK Government this month had been “satisfactory”

The EU-27 countries are demanding a cash settlement, plus swift guarantees on the rights of their citizens in the UK and a plan for the Northern Ireland border, before wider discussions take place.

Mr Juncker’s words made clear that a summit of leaders in October is likely to rule that too little progress has been made. He said: “First of all we settle the past before we look forward to the future.”

Mr Juncker said the UK “hesitates showing all its cards”, adding: “I did read, with the requisite attention, all the papers produced by Her Majesty’s Government and none of those is actually satisfactory.

“So there is still an enormous amount of issues which remain to be settled. Not just on the border problems regarding Ireland and Northern Ireland — which is a very serious problem in respect of which we have had no definitive response — but we also have the status of European citizens living in the UK and UK citizens living on the Continent.”

Yesterday, Brussels’ chief Brexit negotiator, Michel Barnier, said he was worried about the lack of clarity and insisted: “We must start negotiating seriously.” 

British officials in the Belgian capital were this afternoon planning to begin a “line-by-line interrogation” of the legal basis for a separation payment.

The move, taking place behind closed doors, will further infuriate the Commission. It has asked for an agreement on how a settlement can be calculated. Instead, Brexit Secretary David Davis has told his team to demand a legal justification for each portion of the payment.

An official said: “It is for them to set out what they think is the legal basis for a settlement. We will be setting out our legal analysis of the presentation they have put forward so far.”

Pro-European Conservatives warned that further delays over the cash issue risk derailing talks on trade and future UK-EU relations, which are vital to businesses.

Chancellor Philip Hammond has said firms need to know where they stand by the end of the year or they may invoke contingency plans to move key staff abroad.

Anna Soubry, the former business minister, said the Government risks running out of time. “We need to face up to the reality that we do not hold all the cards,” she said.

“The whole thing is in danger of turning into a farce. We triggered Article 50 months ago, yet are only now publishing consultation papers on what our position should be. 

“The clock really is ticking. Time is limited for this ferociously complicated negotiation and we have been clowning around.”

Most senior Cabinet ministers accept that Britain will probably end up paying up to £40 billion to cover a share of planned spending — decided before last year’s Brexit vote — and future liabilities such as the pensions of Commission staff. However, hardline Brexit-backers say there is nothing in any European treaty that requires Britain to pay a penny after leaving. 

Pro-Remain MPs may attempt to force the Government to speed up its negotiations when the Commons returns from summer recess next week.

A new all-party group on European Union Relations will be formally launched in the autumn, with the aim of building up broad support for a soft Brexit.

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