Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Theresa May to use Brexit transition offer as ‘key’ to settling EU divorce bill Theresa May will attempt to break the Brexit impasse when she delivers a speech next week in Florence setting out her plans for a transition deal that is seen in London as the “key” to addressing Brussels’ concerns about a €30bn budget hole. The prime minister is expected to flesh out Britain’s hopes for what Philip Hammond, the chancellor, has called a “status quo” transition deal, lasting for two or three years after Britain leaves the EU in March 2019… The most-recent official fiscal forecasts would allow Britain to make almost exactly €30bn in net payments to the EU over three years without pushing up borrowing. An offer of payments during the transition period would be seen as a welcome step in Brussels, and would be likely improve the prospects of the two sides beginning trade talks in the coming months. – FT (£) Why the British prime minister chose the Italian city for her big Brexit address – Tom McTague and Guilia Paravicini for Politico ‘No hard feelings’ towards Britain, insists Jean-Claude Juncker, as he predicts there will be a Brexit deal… Jean-Claude-Juncker today insisted he had no “hard feelings” towards Britain and predicted the UK and European Union would avoid a “hard Brexit” by striking a deal on the terms of the split. Mr Juncker denied he needed to make an example of Britain to prevent other countries leaving the EU. “I don’t know another country tempted to leave the EU and I don’t want to punish or sanction the British people because I like them too much,” the European Commission president said during a TV interview with three young YouTube stars broadcast on Euronews. “My working hypothesis is there will be a deal. I don’t want to imagine a situation where UK would leave the EU without a deal,” Mr Juncker said. – Telegraph (£) …as EU Commissioners rubbish suggestions that Brexit Britain will be back of the queue for free trade deal European Union commissioners today laughed off suggestions that Britain would be at the back of the queue for a free trade deal with the EU after Brexit… Jyrki Katainen, the former Finnish prime minister responsible for investment, told The Telegraph that fears Britain would have to wait at the back of the line were unfounded. ”Forget this nonsense,” he said in a Brussels press conference, after describing newspaper reports that claimed the EU would punish Britain for Brexit by withholding trade talks. “As soon as we know about the future arrangement, negotiations will start then,” he said. – Telegraph (£) France and Germany want right to suspend passport-free Schengen area ‘for years’ over terror and migration fears France and Germany are demanding the right to suspend the European Union’s passport-free travel zone for up to four years at times of crisis amid fears over terrorism and migration. A confidential diplomatic paper seen by The Times reveals that the EU’s two biggest countries are pushing for the Schengen zone to be suspended in “exceptional circumstances”, making all travellers subject to border checks as they enter a country… The demand will be a blow to Jean-Claude Juncker, president of the commission, who said on Wednesday that the passport-free travel zone, alongside the euro, was a foundation for a future federal Europe. Under the border-check proposals, which are also supported by the Schengen members Austria, Denmark and Norway, governments would be allowed to introduce frontier controls for years rather than months and to keep their reasons for the checks secret. – The Times (£) Orbán wins the migration argument – Jacopo Barigazzi for Politico Sir James Dyson says UK should ‘make a clean break from Europe without an interim deal’ Britain should make a “clean break” from the EU and abandon attempts to thrash out a transitional deal, according to vacuum cleaner entrepreneur Sir James Dyson. A leading figure in the Leave campaign, Sir James said it was “quite wrong” to call the EU a “single market”, saying companies operating across Europe already face different languages and laws. The billionaire claimed the EU was “actually a very highly complex and broken up market” and that Britain should instead focus on other fast-growing markets worldwide. – Telegraph Quitting the EU will create some huge opportunities – Express editorial …as former Bank of England governor Lord King urges Government to make viable plan to walk away from talks Brexit negotiations are not going the way the UK had hoped, the former Bank of England governor Lord King has said as he urged the Government to make clear it has a viable plan to walk away from the talks. Lord King said Brussels needed to know that Britain was prepared for a “no deal” scenario. He said a “separate team” should be tasked with drawing up a blueprint for such an eventuality to show the EU that the UK is ready to leave the bloc without agreeing to new trading arrangements… “It’s not our first preference but we can do it, and we need a team of people who are capable of delivering that.” – Telegraph Hilary Benn’s Brexit Select Committee launches inquiry into state of Brexit negotiations MPs have launched an inquiry into the state of Brexit negotiations after the latest round ended in recriminations about a lack of progress. The Exiting the EU Select Committee will explore the strategy of the UK Government, as well as try to determine whether it has the capability to manage the process effectively… Committee chair Hilary Benn said: “The Brexit negotiations are the most complex our country has ever faced… Our first inquiry in this new parliament will scrutinise the progress of these negotiations, and the position of the UK Government and our negotiating partners in the EU.” – Independent Lord Howard attacks Barnier for treating Britain like a “defeated country” The former Conservative leader Michael Howard has said the EU’s chief negotiator is acting like “the representative of a country that has just won a war.” The Tory grandee said he had wanted to “sit down with our former partners” and have a “friendly discussion” but said that his hopes had been dashed by Michel Barnier. Speaking at BrexitCentral’s first Birthday party in Westminster last night, Lord Howard of Lympne said: “Mr Barnier seems to be acting as the representative of a country that has just won a war and is determined to exact the maximum amount of reparations from a vanquished, defeated country. But we are not a vanquished, defeated country.” – BrexitCentral EU chief negotiator Michel Barnier has been accused of treating Britain like a “defeated country” – Express Lord Howard accuses Michel Barnier of acting like a war victor for demanding ‘reparation payments’ – The Sun Michael Howard says Michel Barnier acting like he has defeated Britain in a war – PoliticsHome > WATCH on BrexitCentral: Michael Howard says Barnier acts like he’s defeated us in war CBI letter from UK and EU firms to urge both sides to reach faster Brexit deal Business leaders who employ around one million workers in the UK and EU will sign a letter this weekend, imploring both sides of the Brexit negotiations to get a move on. A draft of the letter, seen by the BBC, urges negotiators to clarify the rights of UK and EU citizens working abroad by October. It also calls for real progress towards future arrangements by the end of 2017… After an election campaign that saw the Conservative Party distance itself from big business, bosses have reported a thawing in relations with government. Some of the UK’s top business leaders will gather tomorrow night at the government retreat in Chevening to discuss the process of withdrawal from the EU and future trading relationships. – BBC News CBI still trying to wreck Brexit: Bosses who backed Remain now demand up to three years’ delay before leaving the EU – Daily Mail HMRC needs more staff to handle Brexit trade work on Britain’s borders Bosses at the department told MPs they need to know what to expect from the negotiations with the EU within the next six months so that officers can plan for departure day in March 2019… “Based on a crude extrapolation from if your customs declarations multiply five-fold and if you multiplied your resources five-fold, it would come out at an extra 3,000 to 5,000 people,” said Jim Harra, HMRC’s director general for customer strategy. He said that he does not anticipate the figure will be quite that big as some of the companies importing and exporting goods will already work closely with HMRC and so can be scaled up easily. – Telegraph How to reform the civil service – so it can cope with Brexit – Francis Maude for the Spectator Next softens doom and gloom forecasts despite fall in profits At the start of 2017, the Next chief executive, Simon Wolfson, warned of a tough year ahead but on Thursday he softened his stance: “While the external environment looks set to remain difficult, from where we stand today our prospects appear somewhat less challenging that they did six months ago.” …Wolfson, a prominent Vote Leave campaigner whose views on the economy are closely watched, also predicted that Brexit-related price rises would come to an end next year… “Next year price inflation looks set to work its way out of the system as the effects of the one-off Brexit devaluation of the pound begin to annualise,” he said. – Guardian John Lewis profits halve as chairman warns over Brexit uncertainty – Guardian John Lewis doesn’t have a Brexit problem. It has a Waitrose problem – Ross Clark for the Spectator Small UK businesses looking to Hong Kong and China for post-Brexit opportunities, study suggests – City A.M. John Longworth: Come on out Chancellor, the nation needs to hear your plan for Britain’s post-Brexit economy What is remarkable is that given we are in the throws of the most significant shift in the UK economy in a generation, a period of unprecedented and exciting, creative disruption, the Treasury have made no comment on the future model for the post Brexit Economy, no plan to make Britain more prosperous than it otherwise would have been by staying in the EU. They haven’t even commented on the projected shape of economic growth. Why is this? While other departments like Dexeu, DIT, Foreign Office and Defra make plans, statements, and negotiate to produce a good outcome for Britain, the department accountable for the economy – the Treasury – say nothing. Where is the plan for Britain’s post-Brexit economy? – John Longworth for the Telegraph (£) Matthew Elliott: Why the German election matters, despite Angela Merkel’s inevitable victory Merkel is by far the preferred Chancellor over the Social Democratic (SPD) candidate Martin Schulz, and she is set to win a historic fourth term… Yet this does not mean that the election result on 24 September is entirely inconsequential. The result will have a significant impact for two reasons: the composition of the coalition, and the impact on the Brexit negotiations and future EU integration… The ideal outcome for Britain is a coalition with the FDP, which holds the most favourable stance towards Britain in the negotiations, saying it would call for an amicable compromise in the Brexit talks. – Matthew Elliott for City A.M. Philip Collins: Labour must stop trying to frustrate Brexit The point Caroline Flint has grasped quicker than her colleagues is that the shrunken esteem of politics was one reason people voted to leave the EU in the first place. Can you imagine the response if the political class contrived somehow, through procedural manoeuvres in parliament, to ensure that the verdict of the referendum were thwarted? The cost to the reputation of politics would be high. As it did during the referendum, the Remain side speaks only in pounds and pence. It devalues the invisible currency of esteem. That point rests on imponderable questions such as: how long does the writ of a referendum run? Would a general election overturn its verdict? And, if a country has the right to change its mind, how do we know when it has done so? The argument on all these questions is disfigured by the fact that everyone is so boringly partisan. – Philip Collins for The Times (£) Lords must add a referendum on Brexit deal to EU (Withdrawal) Bill – Lord Adonis for The Times (£) John Mills: Britain better off outside the single market The best way forward is for the U.K. to leave the single market but strike a free-trade deal with the EU. This would give us tariff-free access to its market without the downsides of single market membership. The question, of course, is whether this is feasible. Would the EU ever accept such an offer? It’s worth remembering that the U.K. is one of the largest export markets for EU members. Surely, it would make sense for Brussels to offer us terms that are no worse than they are for other countries. But because the EU is also concerned about striking a deal that appears to be too favorable to Britain, we must be prepared to walk away without one. That means being willing to fall back on the terms set by the World Trade Organization (WTO), which allow us to trade with the EU but impose tariff barriers that average around 3 percent. – John Mills for Politico Britain better off in the single market – Frances O’Grady for Politico UK ‘could overrule some EU laws if it signs up to Norway-style arrangement’, claims EFTA Court President – Telegraph (£) The question of Brexit and the ‘Norway model’ hasn’t gone away – Bloomberg Christian May: The City is taking matters into its own hands in search of a Brexit deal [S]ubstantial work is already being undertaken by the International Regulatory Strategy Group (IRSG) with much of the leg work being done by law firm Hogan Lovells. Their document will be launched in Brussels on 26 September, and sources suggest its findings (on how to keep financial services healthy post-Brexit) can be taken as a strong indication of the government’s thinking. Ministers are, it would seem, happy to let the professionals do the heavy lifting on this one. Most interestingly, I’m told that there’s huge appetite for such a document on the EU side, too. While David Davis and Michel Barnier wrestle over money in public, officials on both sides of the English Channel are beavering away on a future financial services framework. – Christian May for City A.M. Asa Bennett: Europe is starting to fear a ‘no deal’ Brexit – Michel Barnier best not push Britain too far Concern about the prospect of a “no deal” Brexit is being felt across the continent. The Finnish Chambers of Commerce has teamed up with their British counterparts to call on both sides to avoid a negotiating result that creates “new obstacles or increased costs” to trade. Matthias Wissmann, head of the German Automotive Association, told Sky News that contingency plans were being formed to deal with the “worst case scenario” of talks collapsing and Britain leaving without an agreement. The “higher price would be paid by the British” in a “cliff-edge Brexit”, he thought, but it would still be “very critical for all sides”. – Asa Bennett for the Telegraph (£) Nigel Gardner: Why Europe will miss the disruptive Brits So will Europe without the Brits turn out to be a harmonious club? My suspicion is not, despite Jean-Claude Juncker’s claim this week that “the wind is back in Europe’s sails” and that a new drive for closer integration is on the way. The reality is that for almost five decades, hiding behind the awkward Brits has been the oldest trick in Brussels. The UK’s constant digging-in of heels has allowed other governments to steer clear of negotiating clashes, safe in the knowledge that Britain and its Eurosceptic media would do the blocking of unpopular measures for them. – Former European Commission spokesman Nigel Gardner for the Guardian Brexit is enabling the federalist eurocrats to stage a power grab – Rachel Cunliffe for City A.M. Brexiteers should speak up in the face of Juncker’s State of the Union address – Steven Woolfe MEP for Reaction Jeremy Warner: Jean-Claude Juncker has drawn entirely the wrong conclusion from Brexit. He is risking the EU’s disintegration Far from seeing Brexit as a warning, Juncker and others have drawn the opposite conclusion; they plan to go deeper into the very things Britain has rejected. That self-confidence stretches even to prospects for monetary union, an endeavour which on any objective analysis must be deemed the most calamitous experiment in economic policy-making of the modern age. To Mr Juncker, on the other hand, it is evidence of European destiny and determination. They wrote it off as a “pipe dream”, Mr Juncker told European MPs, yet now it is a “reality”, as if its mere survival fully vindicates its disastrous consequences. For Mr Juncker, the goal is worth the sacrifice. – Jeremy Warner for the Telegraph (£) Lib Dem leader Vince Cable says ‘extremist’ EU chief Juncker is ‘wrong man’ for job – Express Brexit in brief Beware a Brexit that makes us less secure – Lee Rotherham for CapX Misreading Germany has been a reliable thread of 44 years of British EU membership – Philip Stephens for the FT (£) Brex and the City: Beware the seduction of Labour’s new strategy – Catherine Neilan for City A.M. Ultra-remainers are wrong: the City of London is going from strength to strength – Maggie Pagano for Reaction It’s time for Theresa May and Nicola Sturgeon to change tactics on Brexit – Alan Cochrane for the Telegraph (£) Will Brexit be another Black Wednesday crisis for the Conservatives? – Will Jennings and Jane Green for The Times (£) Lib Dems still hope their time will come – Annabelle Dickson for Politico No Deal is the very worst deal for the UK – Lord Bilimoria for Reaction EU citizens living here are vital and we want them to stay – Brandon Lewis for The Times (£) May will have to heed opposition on Brexit Bill, says Leadsom – Bloomberg Gatwick boss says urgent certainty is needed for Brexit flying rights – City A.M.