Theresa May has her team looking into a contingency plan to hold back billions of pounds in Brexit payments in case the EU refuses to give the UK a favourable trade deal, according to Bloomberg.
This is seen as a backup plan, and addresses the main risk of the Brexit structure: the UK will leave the EU and pay an exit bill (worth around GBP 40 billion) before it signs any trade deal.
The EU has only offered a statement of intent on what the two sides might achieve in a future trade deal. If that doesn’t happen, the UK could hold back payments, which are due to be paid over several years.
The UK has repeatedly expressed its wish for at least a basis of a trade deal to be in place before the exit, with Brexit secretary David Davis saying that the deal would be signed “a nanosecond” after the exit. However, some argue that the whole transition period won’t be enough to complete a trade negotiation (it took seven years in the case of Canada).
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