UK government is still busier negotiating with itself than with the EU

Big Ben, Westminster

If there is one hard certainty to be salvaged from the latest wave of Brexit froth, it is that the British government is still more preoccupied negotiating with itself than the EU.

Downing Street was quick to knock down weekend reports that it had made up its mind how much money it was prepared to pay the EU when Britain leaves. But the seemingly well-sourced Sunday Telegraph figure of £36bn was endorsed by Brexit-watchers with impeccable Whitehall contacts and was far from convincingly dismissed when journalists pressed further in Monday’s lobby briefing.

Instead it appears that the briefings and counter-briefings follow the pattern of that other summer squall over how long Britain wishes to remain in a transition phase. In both cases, politicians and civil servants in the UK are debating among themselves as a prelude to more meaningful talks with Brussels this autumn.

A series of position papers due next week will hopefully flush their differences out into the open and start to commit the country to a less jelly-like negotiating stance. Either way, until the details of a unified British offer on money or transition are tested against what EU negotiators are actually prepared to accept, it is wise to take all the furious spray in Westminster with a pinch of salt.

Nonetheless, there is another similarity between the back and forth over the divorce bill and the Westminster row over transition. In both cases, Britain increasingly looks like it wants to play for time to soften the political and economic impact of Brexit back home.

The longer it can agree a transition that looks a lot like EU membership, the more time there is for businesses to adjust to life outside the single market and customs union. Crucially, however, it could also take the political sting out of having to write a large cheque to those dreaded Brussels bureaucrats.

A transition phase of three years, such as that proposed by the chancellor, Philip Hammond, would take Britain comfortably through to the end of the current EU budget cycle in 2019-20. The bulk of the up to €100bn (£90m) currently demanded as a financial settlement relates to unfunded commitments known as reste à liquider (RAL). If meeting these obligations can be disguised as part of the transition arrangements rather than an exit bill, then compromise may be possible.

For this reason, the transition talks will be critical. The EU negotiator Michel Barnier currently has no mandate from member states to discuss post-Brexit arrangements until progress is made on the exit arrangements. Britain does not want to cede ground until it can be sure a business-friendly trade deal is in sight, or at least cushioned by a transition phase.

Yet those familiar with the thinking of the Brexit secretary, David Davis, say he expects to bridge the impasse by agreeing progress on both fronts simultaneously. Britain may only be negotiating with itself for now, but there are hints of how it eventually hopes to persuade Brussels to go along with the plan too.

Powered by Guardian.co.ukThis article was written by Dan Roberts Brexit policy editor, for theguardian.com on Monday 7th August 2017 14.32 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010