Having spiked overnight on the back of surging inflation, Cable just tumbled after it appears disagreements over the 'divorce' payments forced EU and UK to postpone the next round of Brexit talks... for a cooling off period?
As we detailed previously, the EU is accusing UK of backtracking on its promise to pay an exorbitant fee to leave the union.
EU negotiators were said to have been left “flabbergasted” after British lawmakers told them there was little or no legal basis for their £90billion claim. A young civil servant reportedly left EU negotiators “open-mouthed” with a line-by-line “technical” demolition of the demand.
Tory grandee John Redwood said last night that there was no legal basis for the demand. He also said Mr Davis had no right to authorise it without parliamentary approval.
“Article 50 is clear,” he said. “Once a state leaves it has no further rights and benefits, and no further duties or obligations. It is of course true the treaty does not prevent the EU accepting a payment volunteered by a departing state if it wished to pay one. However, the UK could not make such a payment legally under our own law and system for controlling public spending.”
The former Welsh secretary, who voted for Brexit, said ministers have “absolutely no authority to make one-off additional payments to the EU. The only way Mr. Davis could authorize a leaving payment would be to put through an Act of Parliament specifically authorizing such an ex gratia payment. I can’t see many Conservative MPs wanting to vote for that.”
Eurosceptics on both sides of the house said MPs were likely to vote down any demand deemed “excessive” – even those who had voted Remain.
Mr Rees-Mogg said: “Almost certainly there will have to be a vote. The money has to be voted through by Parliament and with MPs facing the fury of voters, it cannot be too much money.”
Fellow Brexiteer and Tory MP Andrew Bridgen said: “Any deal will have to go through Parliament and if its seen in any way excessive then it won’t go through.”
Referring to an ICM poll which found that two-thirds of voters would find paying anything over £10 billion “unacceptable”, he added: “That polling data gives you a ballpark figure of what the British public would find acceptable. We buy more from the EU than we sell, we aren’t charging them for access to our market so what possible reason would they have to charge us for access to theirs unless they want to cost Europeans their livelihoods?
“The British public won’t accept a punishment payment. No MP in their right mind would vote for that, whether they are Brexiteers or Remainers. The EU is talking about multi-billion pound payments in line with the entire NHS budget. The electorate won’t stand for it.”
Labour MP Kate Hoey, who also voted Leave, agreed. She said: “If you give up your membership of a leisure or social club, you don’t have to carry on paying for the staff pensions after you’ve left.”
It appears that has pushed the negotiators to delay proceedings...
Of course this is not exactly new news. Last week, European Parliament's Brexit representative Guy Verhofstadt already highlighted this risk.
“Possibly the next round of negotiation will be the last week of September, not the third week of September.”
Verhofstadt explained on September 4, “Apparently there will be an important intervention by the British prime minister in the coming days, foreseen on September 21, and then it’s a little bit stupid that there is this mixed with the negotiation round.”
This has been confirmed by the Bloomberg report, which suggests that the next round will only be delayed by a week (from September 18 to 25).
We would expect cable to bounce back.