First round of Brexit talks end in stand-off over divorce bill

David Davis is in Brussels today for Brexit talks. Picture; PA
David Davis is in Brussels today for Brexit talks. Picture; PA
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The European Union has warned “fundamental” differences remain over key issues standing in the way of a Brexit deal with the UK after the first round of substantive talks.

Brexit Secretary David Davis and EU chief negotiator Michel Barnier yesterday said their teams had inched towards a compromise on post-Brexit citizens’ rights during a week of meetings, but remained at an impasse over the role of the European Court and the size of the UK’s “divorce bill”.

The UK government announced new concessions, saying qualifying EU citizens in the UK would retain voting rights in local elections. The government also said it would give EU citizens who qualify for post-Brexit “settled status” greater flexibility to move away from the UK for limited periods without losing their rights.

READ MORE: EU gives UK October deadline for Brexit talks progress

However, UK government sources said EU negotiators were blocking plans to run criminal records checks on applicants for settled status, proposed in order to expel convicted criminals.

The limited progress raises the stakes for the next rounds of talks in August and September, ahead of an October deadline set by the EU to make progress on the issues of citizens’ rights, the multi-billion-pound financial settlement, and the Northern Ireland border. Both sides have agreed that talks on a vital post-Brexit trade deal between the UK and EU cannot begin until “sufficient progress” has been made on those priorities.

Behind the scenes, UK negotiators are understood to be frustrated by the EU’s refusal to consider criminal records checks for European nationals, as blanket checks are not permitted under current free movement rules.

British officials are also insisting that UK nationals living in the EU also have their voting rights protected, and retain the right to move between the 27 EU member states after Brexit.

A UK government source said: “We still have doubts about the EU’s plans and their commitment to upholding citizens’ rights. The UK has put a serious offer on the table, but there are significant gaps in the EU’s offer.

“The Commission and the member states now need to go away and discuss how they can bring their offer up to the level of the UK’s. What we’re offering EU citizens living in the UK is fair. We expect UK nationals living in the EU to be treated with the same respect.”

In a joint press conference at the end of four days of talks, the EU’s chief negotiator appeared to criticise the UK for a perceived lack of preparedness, singling out the government’s refusal to set out its position on its financial obligations to the EU. Mr Barnier said progress had only been possible “for the issues on which there was a clear British position”.

He said: “A clarification of the UK position is indispensable for us to negotiate and for us to make sufficient progress on this financial dossier, which is inseparable from the other withdrawal dossiers.

“What we want – and we are working on this – is an orderly withdrawal for the United Kingdom, that’s decided. An orderly withdrawal means accounts must be settled. We know that agreement will not be achieved through incremental steps. As soon as the UK is ready to clarify the nature of its commitments, we will be prepared to discuss this with the British negotiators.”

The EU chief negotiator also called for further detail on how the UK government intends to make the Common Travel Area with the Republic of Ireland work after Brexit ahead of the next round of talks, expected in August.

He said: “We require this clarification on the financial settlement, on citizens’ rights, on Ireland – with the two key points of the common travel area and the Good Friday Agreement – and the other separation issues where this week’s experience has quite simply shown we make better progress where our respective positions are clear.”

Mr Barnier said the EU was not ready to compromise until the UK accepts its financial obligations.

He said: “I know one has to compromise in negotiations, but we are not there yet.”