Brexit: Philip Hammond rejects €100bn divorce bill figure

Chancellor Philip Hammond has rejected reports that the UK could be asked to pay as much as €100bn (£84.5bn) as part of its divorce settlement with the European Union.

The new figure, which is significantly higher than previous estimates, reflects stricter demands by Germany and France, according to analysis by the Financial Times.

But Mr Hammond, speaking at an election event, told Sky News: "I don't recognise this number, I genuinely don't recognise it.

"It's moved by 60% in the space of a few days... What we do know is that we're on the brink of a very tough, complex, lengthy negotiation.

"I'm not remotely surprised people are manoeuvring for opening advantage in that negotiation."

Brexit Secretary David Davis has also asserted Britain "will not be paying €100bn", adding: "We have not seen a number".

"We will do it (negotiate) in the meeting, we will do it properly, we will take our responsibility seriously," he told Good Morning Britain.

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Unveiling his draft negotiating mandate in Brussels, the EU's chief negotiator, Michel Barnier, said he could not put a figure on the settlement but added Britain has to "respect" its financial commitments as a member state.

He said: "Commitments have been made and they have to be honoured.

"I want to reach an agreement on behalf of the 27 (remaining states)... we are not trying to create problems, we are trying to resolve problems."

Mr Barnier added that it would be "explosive" if Brexit caused an EU funding shortage which ended projects across the continent.

He said: "All we are asking for is for the accounts to be cleared.

"It is not a blank cheque... leaving the union does not have a price which needs to be paid".

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Earlier, the European Parliament's Brexit coordinator, Guy Verhofstadt, said the financial settlement "is nothing to do with punishment or revenge".

He said: "We say let's agree on sound accounting principles… if you agree on that, the figure is the outcome.

"It is fairness and we cannot ask to the 27 remaining members of the EU to pay the bill for the departure of a country - that will not be done."

The €100bn figure has emerged as a result of EU member states maximising the liabilities Britain is expected to face.

Subsidies paid to farmers and EU admin fees until the end of the decade have contributed to the higher figure, as has an insistence that the UK will not receive a share of assets, such as real estate, as it leaves.

A European Council source told Sky News that no consistent figure was possible because it is not clear yet when the UK will actually leave.

"It's difficult to put figures on the table, even if you wanted to, because as long as the UK is a member the figures will keep changing," the source said.

The Brexit "bill" is more accurately characterised as the financial costs to which Britain has already committed.

The remaining members of the EU are deeply concerned at the hole in the EU budget which Brexit will leave.

The relationship between Brussels and London has deteriorated sharply over the past week, following a dinner at Downing Street hosted by Theresa May for Mr Juncker and Mr Barnier.

According to leaked reports, the dinner was a disaster with sources claiming the discussion showed the two sides were "galaxies apart".

Mr Juncker was quoted as saying that he had "ten times as sceptical as I was before".

Both sides have publicly denied the spat and Mr Juncker told Sky News the meeting went well.

Mrs May said last week that she would "personally negotiate Brexit with the prime ministers, presidents and chancellors of Europe".

European Council sources have previously told Sky News that some of the large Brexit issues would be handled at leader level - meaning the countries' leaders themselves, supporting Mrs May's claim.

However, Commission draft guidelines have stated that all the negotiations will be handled by Mr Barnier and his team and that no direct contact will take place between leaders.