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Raab signals Britain will not pay Brexit settlement without a trade deal

Dominic Raab accused the EU of deliberately ramping-up pressure. Photo: PA Wire/PA Images

The UK could refuse to pay its £39 billion divorce bill to Brussels if it does not get a trade deal, the new Brexit Secretary has signalled.

Dominic Raab said there had to be "conditionality" under the Article 50 withdrawal mechanism between settling Britain’s exit payment and creating a new relationship with the EU.

In an interview with the Sunday Telegraph, Mr Raab suggested the divorce bill could be used as leverage in talks.

And in a later interview on the BBC's Andrew Marr Show, he accused Brussels of "irresponsibly" ramping-up pressure in withdrawal negotiations.

His comments came after Brussels said a no deal scenario would mean there would be no specific arrangements in place for UK citizens living on the continent, or for EU migrants in Britain.

But he remains confident that a deal could be struck with the bloc by October.

Theresa May called on the EU to 'evolve' its negotiating position. Credit: PA

In his interview with the Sunday Telegraph, Mr Raab indicated he was still trying to persuade all members of the Cabinet that Theresa May's Chequers agreement was "the best plan to get the best deal".

Meanwhile, his predecessor David Davis, who resigned over the Chequers plan, used an interview with the Sunday Express to urge the Prime Minister to "reset" her negotiating strategy.

Speaking of the divorce settlement, Mr Raab told the paper: "Article 50 requires, as we negotiate the withdrawal agreement, that there’s a future framework for our new relationship going forward, so the two are linked.

"You can’t have one side fulfilling its side of the bargain and the other side not, or going slow, or failing to commit on its side.

"So, I think we do need to make sure that there’s some conditionality between the two."

Pressed on whether he would put such a provision into legislation, Mr Raab said: "Certainly it needs to go into the arrangements we have at international level with our EU partners. We need to make it clear that the two are linked."

Britain will be leaving the European Union in March 2019. Credit: PA

Appearing on the Marr show, Mr Raab was critical of Brussels's comments about the impact of no-deal on citizens living abroad.

"Well, I think that's a rather irresponsible thing to be coming from the other side," he said.

"We ought to be trying to reassure citizens on the Continent and also here.

"There is obviously an attempt to try and ramp-up the pressure."

Mr Raab said he would be returning to Brussels on Thursday for more Brexit talks.

He said: "If it's reciprocated, the energy that we are going to bring to these negotiations, the ambition, and the pragmatism, we (will) get a deal done in October."

Ex-Brexit Secretary David Davis (l) resigned over Theresa May's proposals. Credit: PA

Mr Raab's threat to walk away without paying appeared at odds with Chancellor Philip Hammond, who said of the divorce payment last December: "I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation.

"That is not a credible scenario. That is not the kind of country we are. Frankly, it would not make us a credible partner for future international agreements."

Mr Raab also defended the controversial Chequers Cabinet compromise on withdrawal aims, insisting he wanted to persuade voters and Cabinet colleagues that it is the way forward.

The Brexit Secretary said: "I want to make sure we can persuade everyone – grassroots, voters, parliamentary party and ministers, including in the Cabinet – that we've got the best deal and the best plan to get the best deal."

The Brexit Secretary said critics were mistaken to think Mrs May would not walk away without a deal if she had to.

"They’re wrong. No bluffing.

"The ball is now in the EU’s court, and don’t get me wrong, there will be plenty more negotiations, I’ve made that clear, but if they show us the same level of ambition, energy, pragmatism, this deal gets done in 12 weeks."

The Prime Minister's Brexit plan agreed at Chequers has divided opinion. Credit: PA

Mr Davis, who quit as Brexit secretary in protest at the Chequers agreement, said the PM needed to "start again" on withdrawal plans.

"We're going to have to do a reset and come back and look at it all again," he told the Sunday Express.

"I think when we get to the autumn, if we are in the situation where we don’t have any degree of agreement, we’re going to have to start again."

Mr Davis suggested the Government draws up fresh proposals based on an amalgamation of the "best bits" of deals the EU has already struck with other countries, such as Canada, South Korea, Switzerland and New Zealand.

Meanwhile, preparations for no deal need to accelerate from the current position of "consult and cajole" to “command and control”, he told the paper.

"By the end of the summer it should be plain we are making proper preparations for this," he said.