Brexit: EU should stop squeezing UK for 'divorce settlement' and focus on trade deal, CBI says

Some prominent figures have called for Britain to be slapped with a bill of tens of billions of euros when it leaves the EU

Businesses across Europe want the closest possible economic relationship post-Brexit, Carolyn Fairbairn, director general of the Confederation of British Industry will say (PA)

European leaders should stop focusing on securing a hefty “divorce settlement” from the UK and start hammering out a post-Brexit a trade deal, Britain’s leading business group will say on Thursday.

Businesses across Europe want the closest possible economic relationship post-Brexit, Carolyn Fairbairn, director general of the Confederation of British Industry will say in a speech at Cambridge University.

Ms Fairbairn will call on European decision-makers to listen to companies in their respective countries, many of which want politicians to “get on with discussing a new trading relationship”, rather than squeezing Britain.

“Far from being about doing the UK a favour, it is based on solid economic reasoning for both sides,” Ms Fairbairn will say.

The CBI chief will highlight the “overwhelming shared interest in building the trading relationships which will define our shared future. This is not a zero-sum game,”

On Saturday Europe’s leaders will meet at the EU Summit to agree a response to the Article 50 letter triggering Brexit negotiations.

Some prominent figures have called for Britain to be slapped with a bill of tens of billions of euros when it leaves the EU. But the CBI will say that the “real prize” is the long-term trading relationship between Britain and the continent which is worth €600bn, dwarfing any potential one-off payment.

“For both sides, leaving the negotiating table without a deal shouldn’t be ‘Plan B’ but ‘Plan Z’. Whether it’s tariffs or regulation, a no deal scenario would have chilling effects on both sides of the Channel,” Ms Fairbairn will say, in prepared remarks.

“What is in both sides’ long-term mutual interest must not be clouded. It’s important that policy makers in the UK and Europe listen to these messages from the factory floors, labs and studios of firms across Europe.”

Documents leaked last week suggest the EU has toughened its stance in recent weeks, diminishing Britain's hopes of striking a trade agreement before leaving the bloc.

“An orderly withdrawal of the United Kingdom from the Union requires settling the financial obligations undertaken before the withdrawal date,” said a European Commission document seen by media organisations including AFP and Politico.

The leaked document, titled "Non Paper on key elements likely to feature in the draft negotiating directives", was drawn up for the European Commission which will conduct Brexit negotiations with Britain.

It covers in more detail the same ground outlined last month by EU president Donald Tusk in the European Council’s draft guidelines, which offered an indication of the bloc’s opening stance last month.

Mr Tusk stressed the EU will insist on agreeing the future of citizens in Britain and the Brexit bill first before considering London's demand for a free trade pact.