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Brexit 'divorce bill' will rise by up to £5bn if Theresa May seeks longer transition period, MPs told Brexit 'divorce bill' will rise by up to £5bn if Theresa May seeks longer transition period, MPs told
(about 1 hour later)
Britain’s so-called Brexit “divorce bill” will rise by £4-5bn if Theresa May seeks a longer transition period than Brussels wants, a Commons inquiry has been told.Britain’s so-called Brexit “divorce bill” will rise by £4-5bn if Theresa May seeks a longer transition period than Brussels wants, a Commons inquiry has been told.
A Government minister did not dispute the figure, which was put to him by the chairman of the European Scrutiny Committee.    “This is something which, like the Roald Dahl Tales of The Unexpected, has suddenly appeared,” said Bill Cash, the committee’s Conservative chairman.A Government minister did not dispute the figure, which was put to him by the chairman of the European Scrutiny Committee.    “This is something which, like the Roald Dahl Tales of The Unexpected, has suddenly appeared,” said Bill Cash, the committee’s Conservative chairman.
The transition period was beginning to look “as long as a piece of string”, Mr Cash told Robin Walker, the Brexit minister, and Sir Tim Barrow, the UK’s ambassador to the EU.The transition period was beginning to look “as long as a piece of string”, Mr Cash told Robin Walker, the Brexit minister, and Sir Tim Barrow, the UK’s ambassador to the EU.
In reply, Sir Tim acknowledged that the Government’s estimate of the financial settlement – between £35bn and £39bn – was based on the transition concluding at the end of 2020.In reply, Sir Tim acknowledged that the Government’s estimate of the financial settlement – between £35bn and £39bn – was based on the transition concluding at the end of 2020.
Guidelines issued by No 10 yesterday hinted that the transition could be longer, while repeating the aim for it to be “around two years” from Brexit Day, in March 2019 - therefore, extending into at least 2021.Guidelines issued by No 10 yesterday hinted that the transition could be longer, while repeating the aim for it to be “around two years” from Brexit Day, in March 2019 - therefore, extending into at least 2021.
However, Sir Tim insisted there was no question of a transition of “unlimited duration” – pointing to the EU’s directives seeking a conclusion at the close of 2020.However, Sir Tim insisted there was no question of a transition of “unlimited duration” – pointing to the EU’s directives seeking a conclusion at the close of 2020.
“That is basis on which we are currently talking to the Commission,” he told the committee.“That is basis on which we are currently talking to the Commission,” he told the committee.
Nevertheless, the latest UK document states – to the fury of many pro-Brexit Tory MPs - that Britain would only stop following all EU rules when both sides are ready to “implement the future partnership”.Nevertheless, the latest UK document states – to the fury of many pro-Brexit Tory MPs - that Britain would only stop following all EU rules when both sides are ready to “implement the future partnership”.
On Wednesday, an EU source exclusively told The Independent: “Britain will have to pay for any transition beyond 2020, probably annually and with no rebate.”On Wednesday, an EU source exclusively told The Independent: “Britain will have to pay for any transition beyond 2020, probably annually and with no rebate.”
Mr Walker also confirmed that transition would require a “complete acceptance of EU law” – with no voting rights in the council of ministers, or European Parliament. Sir Bill did not explain how the cross-party scrutiny committee had learned that the increase in the divorce bill was expected to be £4-5bn.
The revelation will add to controversy over the size and details of the settlement, which the Prime Minister has sought to obscure.
It is already being investigated by the National Audit Office (NAO), which will pore over the “assumptions and methodologies used” to calculate the payment, to settle Britain’s liabilities before EU withdrawal.
Ministers have already clashed with the EU after Brussels insisted the money will have to be paid, even if talks to strike a post-Brexit trade agreement fails.
In his evidence, Mr Walker also confirmed that transition would require a “complete acceptance of EU law” – with no voting rights in the council of ministers, or European Parliament.
“That is the approach that we have consistently taken to this, but recognising it will be for a time-limited period,” he said.“That is the approach that we have consistently taken to this, but recognising it will be for a time-limited period,” he said.
Britain is arguing for a “mechanism for raising concerns” before new regulations are introduced, but the EU seems certain to reject the request.Britain is arguing for a “mechanism for raising concerns” before new regulations are introduced, but the EU seems certain to reject the request.
  The minister did not dispute that none of the 50-odd third countries with which the EU has trade deals had so far agreed to “roll over’ those agreements after Brexit.
More follows… Geraint Davies, a Labour MP, said he had been told that Chile and South Korea were demanding more favourable terms, in order to do so.
  Sir Tim said he had had “no conversations” with any countries which appeared to object to continuing the trade deals with the UK.
Mr Walker also downplayed No 10’s suggestion that oversight by the European Court of Justice (ECJ) – something else which angers Brexiteers – would end at some point during the transition period.