Brexit: David Davis says UK Government could pay money to EU for single market access

David Davis has surprised MPs by revealing the Government is potentially willing to pay the EU in return for the UK gaining access to the single market.

It is the first time any minister has admitted Theresa May’s administration is open to the idea of paying Brussels to secure access to the trading bloc for British businesses and immediately led to a surge in the pound.

The disclosure comes as the Government comes under increasing pressure at home and on the continent to give more certainty over what it wants in any Brexit deal.

Taking questions in the Commons, Mr Davis was asked if the Government would consider making any contribution, in any shape or form, for access to the single market.

Mr Davis said: "The simple answer we have given to this before is, and it's very important because there is a distinction between picking off an individual policy and setting out a major criteria, and the major criteria here is that we get the best possible access for goods and services to the European market.

"If that is included in what you are talking about then of course we would consider it."

So far Ms May and other ministers have doggedly stuck to the line of only saying the Government will aim to secure the "best possible deal".

Labour former shadow health secretary Heidi Alexander claimed the Government had made no progress in forming its plans in the last five months.

Hilary Benn, the Labour chairman of the Commons Brexit Committee, urged the Government to publish more detail on its negotiating plans as he said MPs were "fed up".

He told the Commons: "In a week in which it has been reported that the Foreign Secretary has told EU ambassadors that he doesn't agree with the Government's policy on freedom of movement and that a Dutch member of parliament attended a briefing in Downing Street on the Government's plans for Brexit, does the Secretary of State understand why the House is getting a little fed up with being told nothing?

"If he does, can he tell us when the Government will come forward with its plans for Brexit including on what will happen as regards any future contributions to the European Union after we have left?"

Mr Davis said he is due to appear before the Brexit committee in December and that members of the committee had visited the Department for Exiting the EU.

He said: "But you also know full well as a previous international development secretary, as a previous cabinet minister, that the approach to this, the probable success of the negotiations depend very greatly on us being able to manage the information and keep what needs to be secret, until the last minute secret.

"In terms of the other things you talked about this week, frankly, this is all based on a presumption that a scribbled note in Downing Street actually is anything like Government policy. It wasn't."

Following the remarks sterling was up 1 per cent against the dollar at 1.26, its highest level in three weeks. Against the euro, the pound surged 0.63 per cent to 1.18 euros, aided also by the eurozone currency's struggles in the face of the Italian referendum on Sunday.

Neil Wilson, senior market analyst at ETX Capital, said: "Sterling is on the tear this morning on hopes for a soft Brexit.

"David Davis said the UK could contribute to the EU budget in return for access to markets and that has fuelled a rally for the pound."

Earlier this week a note being carried by an aide into Downing Street was photographed, suggesting the Government wanted to "have its cake and eat it".

It said that Britain is likely to pursue a "Canada plus" trade deal with the European Union, adding that remaining a member of the European Economic Area would be "not good".

Bank of England Governor Mark Carney piled pressure on the government by calling for businesses to have more certainty about the Government’s Brexit goals.