Brexit: EU is trying to 'blackmail' Britain, Trade Secretary Liam Fox claims

The Minister issues a warning to bloc as negotiations stall during the latest round of talks

Fox appears frustrated that the EU insists on settling the ‘divorce bill’ before discussing a future trade agreement (Reuters)

Britain must not be “blackmailed” by Brussels into settling the so-called divorce bill before starting trade talks, Liam Fox has said.

The International Trade Secretary issued the warning as negotiations stalled during the latest round of crunch talks in Brussels and expressed frustration at the European Union’s wish to first agree a financial settlement for when the UK leaves the bloc.

The EU’s chief negotiator Michel Barnier insisted that Britain wants an “impossible” Brexit deal, and that there has been little progress on key issues, despite Brexit Secretary David Davis saying the “high-stress week” of negotiations had delivered “some concrete progress”.

Speaking during a trade trip to Japan, Mr Fox told ITV News: “We can’t be blackmailed into paying a price on the first part.

“We think we should begin discussions on the final settlement because that’s good for business, and it’s good for the prosperity both of the British people and of the rest of the people of the European Union.”

Business leaders across Europe want clarity on the shape of the final deal, Mr Fox later told Sky News.

He said: “I think there is frustration that we have not been able to get on that longer-term issue, that we’re stuck on this separation issue and we’re not able to get onto the issues that will matter in the longer term for the future prosperity of the UK and the people of Europe.”

Mr Davis took a more positive stance than his Tory colleague, as he prepared to tell business leaders in Washington DC that he was a “determined optimist” about the Brexit negotiations.

In a keynote speech to the US Chamber of Commerce on Friday, he offered assurances that Britain will remain outward looking after leaving the EU.

The Brexit Secretary was expected to say: “I am a determined optimist ... I fundamentally believe that a good deal is in the interests of both the UK and the EU and the whole of the developed world.”

It comes as a cross-party group of MPs also warned that leaving the customs union could cost £25bn a year, branding the move as “reckless and economically dangerous”.

Labour’s Chuka Umunna and Tory Anna Soubry, who co-chair the All-Party Parliamentary Group on EU Relations, urged the Government to permanently remain in the customs union.

However, the European Parliament chief Brexit negotiator Guy Verhofstadt dismissed proposals to recreate EU structures as “not serious, fair or even possible given the negotiating time remaining”.

Writing in The Telegraph, he said the UK had to be “more honest” about the complexities of Brexit and to get serious about working out the financial settlement.

He also hit out at calls for flexibility on the deal, as he claimed Britain already enjoyed a unique arrangement with the EU with its own deal on membership of the Euro and the Schengen Agreement.

Mr Verhofstadt said “As the costs of Brexit become clearer, I have no doubt the hardliners who promised the British people utopia will once again seek to blame Brussels for a lack of progress in the talks.

“But is a further poisoning of the atmosphere really in Britain’s interest?”