Philip Hammond 'does not recognise' EU demands for a £50 billion Brexit 'divorce bill'

Laura Hughes
Britain's Chancellor of the Exchequer Philip Hammond - Copyright 2017 The Associated Press. All rights reserved.

Philip Hammond "does not recognise" European Union demands for a £50 billion Brexit "divorce bill", a source close to the Chancellor has said.

It comes amid reports that Brexit supporting Cabinet ministers have told Mr Hammond to cap any "Brexit bill' at a maximum of £3 billion.

Discussion of Britain's exit settlement is likely to dominate the coming weeks after Theresa May confirmed her intention to trigger Article 50 next Wenesday.

Philip Hammond has accused Brussels of "overstating" its position ahead of the negotiations. Credit: Simon Dawson/Bloomberg

Mr Hammond has been told by minister's that they are “categorically against paying in a big lump sum” to cover Britain’s liabilities once it quits the EU, according to the Times. 

Some estimates have put the expected bill - for previously made spending commitments and pension liabilities - at around £50 billion.

One senior Government source told the newspaper: “As the Prime Minister said, we do not want to pay huge sums,” 

"We think anything over £2 billion or £3 billion is not possible. There are those round the Cabinet table who think we are going to have to pay a huge amount to get out, and the Chancellor is on that side.”

Another added: “We are categorically against paying in a big lump sum. Nor do they want it agreed before trade negotiations.

“People are horrified by the chancellor’s suggestion of paying the bills that are owed.”

Jean-Claude Juncker has warned the European Union will demand a "very hefty" Brexit divorce bill

Speaking at the weekend Mr Hammond accused Brussels of "overstating" its position ahead of the negotiations.

A source close to Mr Hammond drew attention to those comments, adding: "We don't recognise the 60 billion."

It follows warnings from Michel Barnier, the chief negotiator for Brussels, that the UK must keep paying “tens of billions” annually into the EU budget until 2020.

The £50 billion bill would include the UK’s share of outstanding pensions liabilities, loan guarantees and spending on UK-based projects.

Jean-Claude Juncker has warned the European Union will demand a "very hefty" Brexit divorce bill.

The Commission President said Theresa May will not be able to negotiate a "cut-price or zero-cost" Brexit and will have to settle the bill for commitments which it entered into as a long standing member.

Sir Ivan Rogers, the UK's former man in Brussels, has said that Brexit has exploded a "bomb" under the European Union's budget and it will seek to claw back money from the UK.

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