May ‘will offer Brussels £20bn for a transition deal’

Theresa May is preparing to offer the EU £20billion in a bid to break the bitter standoff in Brexit talks, it was claimed today.

The Prime Minister is expected to make clear the UK is ready to help fill a gaping hole in Brussels finances when she delivers a crucial speech in Florence on Friday. 

The potential move – effectively going over the heads of Eurocrats like Jean-Claude Juncker and Michel Barnier to appeal to leaders of EU states – emerged after Boris Johnson dramatically pulled back from the brink of resignation last night.

After days of prevarication, in which he hinted he could walk out as Foreign Secretary, Mr Johnson finally dismissed the prospect – having apparently struck a deal with Mrs May.

During a bizarre encounter with journalists in a New York hotel lift, Mr Johnson – who had just returned from a run and was drenched in sweat – was asked if he was going to quit.

‘No of course not, we are going to deliver a fantastic Brexit… We are a Government working together. We are a nest of singing birds,’ he said.

Boris Johnson, picture in a hotel lift in new York today, insisted he is not going to resign as Foreign Secretary as he said the Cabinet is united  behind the PM over Brexit like a ‘nest of singing birds’

Columbia’s President Juan Manuel Santos, left, shows a thumbs up and blanks Boris, right, from the handshake he attempts to initiate, as the past each other riding an escalator during the United Nations General Assembly

His apparent climbdown came after reports that he was so unhappy about the Government’s direction on Brexit that he could resign by the weekend.

According to the Financial Times, German officials have been told to expect Mrs May to make a financial offer for the first time since talks kicked off.

The EU has insisted that discussions on a trade deal cannot start until the UK agrees to a ‘divorce bill’ – which Brussels has suggested could be up to 100billion euros. 

But the offer could be far lower at around £20billion, equivalent to the contributions Britain would have made up to the end of 2020.

In return, Mrs May is likely to demand a transition deal and commitments on preferential trade afterwards.  

It is unclear whether expected peace talks between Mr Johnson and Mrs May took place last night. They had been due to meet in the margins of a Commonwealth reception in New York – the first time they have spoken since he published an unauthorised 4,000-word essay on Britain’s post-Brexit future last week.

Sources have said Mr Johnson will now attend the Prime Minister’s set-piece speech in Florence on Friday where she is due to set out ‘significant’ new thinking on her negotiating strategy.

But No10 remains on guard for a dramatic walkout.

A tumultuous 24 hours began on Monday night when Mr Johnson hinted he was toying with resignation, saying: ‘When the burden of office is lifted from my shoulders I will of course look back with great pride on my time doing all sorts of things.’

Speculation reached fever pitch yesterday lunchtime when a friend told the Daily Telegraph that he ‘could not live with’ a deal that would see the UK shackled to the single market, like Switzerland.

However Mr Johnson, who was cornered by journalists in New York after going out for a jog, then insisted he was not about to quit, and added: ‘It’s all going very, very well.’

The PM’s official spokesman also insisted he did not expect the Foreign Secretary to resign this week. ‘He’s the Foreign Secretary and the PM thinks he’s doing a good job,’ he said.

Mrs May also backed him to stay in her Government, telling reporters that ‘Boris is doing good work’ heading the Foreign Office and adding that the Cabinet has ‘one focus’ over Brexit.

The Prime Minister has summoned an extraordinary meeting of the Cabinet tomorrow to brief ministers on her Florence speech.

Its precise contents currently remain a carefully guarded secret. But No 10 yesterday indicated that the PM is planning a major reset of the Government’s position.

Theresa May, pictured at the UN’s HQ in New York today, said ‘Boris is doing good work’ heading up the Foreign Office and insisted the Cabinet is united and ‘focused’ on delivering the best Brexit deal for Britain 

Theresa May, pictured at the UN headquarters in New York today, told reporters she backs Boris Johnson to stay on as Foreign Secretary despite his friends warning he could quit by the end of the week if she does not bow to his demands over Brexit

Mr Johnson, pictured in New Yok last night, has dismissed the idea that he would quit

Foreign Secretary Boris Johnson (pictured with President Donald Trump on Monday) speculated about his future in government 

Her spokesman said: ‘Clearly this is a significant moment in terms of progress on our future relationship with Europe.’ Mrs May hopes to use the speech to break the deadlock in the Brexit negotiations and kickstart talks on a new trade deal.

She is expected to formally set out plans for a transitional deal with the EU, which would see the UK continue to make budget contributions to Brussels for around two years.

Cabinet sources say ministers have agreed an uneasy truce on the arrangement. But divisions remain on the UK’s future relationship with Europe.

Pro-Remain ministers, including Chancellor Philip Hammond and Home Secretary Amber Rudd, are pushing for a Swiss-style deal that would keep the UK shackled to the single market.

But Brexiteers, including Mr Johnson and Environment Secretary Michael Gove, want a much looser deal focusing on trade, similar to the one enjoyed by Canada.

Relations between Mr Johnson and Mrs May remain in the deep freeze. Despite the fact the pair are staying in the same hotel in New York, they have not spoken since Mr Johnson released his essay last week, which set out a positive case for making a clean break with the EU.

The row has overshadowed the build-up to Mrs May’s pivotal speech this week. 

Mrs May (pictured yesterday with Canadian PM Justin Trudeau) will fly back from her visit to America tomorrow tonight and then convene a special Cabinet on her speech

Mr Johnson’s father suggested his son was unhappy with the Government’s position on Brexit ahead of a major speech by Mrs May (pictured with Justin Trudeau on Monday)

So what is his game? As Boris sparks speculation of a leadership challenge, we look at what was behind five days of drama

Analysis by Jack Doyle

What happened: At 10pm a Boris bombshell lands in the form of a 4,000-word article for the Daily Telegraph. Striking an upbeat tone about Britain’s ‘glorious’ prospects outside the EU, he rejects the idea of paying billions for access to the single market, makes clear his opposition to a lengthy transition and repeats the Leave campaign’ claim of taking back control over £350million a week.

Analysis: Why did he do it? After sticking loyally by the Prime Minister after the election, Mr Johnson has apparently become worried about Brexit going wrong and him carrying the can. He wants to inject some positivity into the Government’s case and is angry that a meeting about Mrs May’s crucial Florence speech was held while he was in the Caribbean. His detractors suggest that his timing – in the aftermath of Parsons Green – is questionable.

Mr Johnson repeated his concerns about the dangers of being dragged into a long transitional deal

Saturday

What happened: Stung by criticism of his article and claims it was the prelude for a leadership challenge, Mr Johnson tweets his support for the Prime Minister. He says he is looking forward to her big speech on Friday. ‘All behind Theresa for a glorious Brexit,’ he says.

Analysis: Downing Street’s attempts to insist the Government is united prove futile. Mr Johnson’s allies deny he is launching a leadership challenge and brief Sunday newspapers that he has support from prominent Leavers, including Michael Gove and Priti Patel.

Sunday

What happened: Home Secretary Amber Rudd slaps Mr Johnson down on the Andrew Marr show, accusing him of backseat driving. Head of the statistics watchdog Sir David Norgrove rebukes him over the £350million claim, but the Foreign Secretary accuses Sir David of distorting his words.

Analysis: Mrs May’s closest allies – Miss Rudd and First Secretary of State Damian Green – take to the airways to reassert her authority. Officials suggest the Prime Minister and her Foreign Secretary will hold peace talks in the US on Wednesday. But it is clear she cannot or will not sack Mr Johnson because doing so would shatter fragile Tory unity.

Monday

What happened: Mr Gove reportedly distances himself from Mr Johnson. An ally tells The Times: ‘If there was a suicide pact of that nature, you’d think Boris would have had the courtesy to tell us he was going to jump.’ Later Mr Gove tweets support for Mr Johnson amid the row over the £350million claim. Arriving in Canada, Mrs May plays down the split, saying: ‘Boris is Boris.’ But Mr Johnson refuses to rule out quitting, talking of a time ‘when the burden of office is lifted from my shoulders’.

Analysis: When asked if they are going to quit, Cabinet ministers would be expected to reply with a firm ‘no’. By refusing to do so, Mr Johnson reveals he is unsure about his future. Evidence of a Cabinet split emerges when former Leave campaign director Dominic Cummings suggests Mr Johnson is concerned the UK will adopt reams of EU regulations and pay into the EU’s budget after Brexit.

Yesterday

What happened: At midday a report suggests Mr Johnson could quit if Mrs May commits to the so-called ‘Swiss model’, agreeing to pay for access to the single market. But, when cornered by reporters outside a lift in New York, Mr Johnson issues a firm denial and insists the Cabinet is as united as ‘a nest of singing birds’.

Analysis: After five days in the spotlight, in which he appeared to be considering his future on an almost hourly basis, Mr Johnson steps back from the brink. But for how long? The next crunch point will be Thursday when the Cabinet will have to sign up to Mrs May’s Florence speech. If he doesn’t jump then, how long before he decides Brexit isn’t meeting the rhetoric of the Leave campaign and walks?