Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team David Davis urges both sides to show ‘flexibility’ at end of week of Brexit talks… The UK and EU are still at odds over citizens’ rights and the amount the UK will pay to leave the bloc, at the end of the second week of Brexit talks. EU negotiator Michel Barnier said the UK had not been clear enough about where it stands on these issues and that was hampering progress. UK Brexit Secretary David Davis said the negotiations on the so-called divorce bill had been “robust”. He said progress had been made but both sides needed to show “flexibility” – BBC Article 50 author attacks Barnier for ‘misleading’ Brexit talks – Express Much talk, few compromises in first Brexit negotiations – Reuters …as EU and UK in divorce bill deadlock Britain not only flatly rejected the EU’s demand that it offer a methodology for computing the financial settlement, as the EU did, but the U.K.’s lead negotiator David Davis refused to even acknowledge the ultimate calculation of the so-called Brexit bill would lead to a net payment to Brussels from London. “We are a country that recognizes its international responsibilities and rights,” Davis said at a news conference with the EU’s chief negotiator Michel Barnier. But Davis added pointedly: “I don’t recognize the phrase ‘net flow,’” referring to a question about payments to Brussels after Brexit. – Politico Britain and Brussels clash over Brexit ‘divorce bill’ – Evening Standard France in incredible attack on Britain over Brexit bill – Express UK reportedly ready to offer free movement for two years after Brexit… Theresa May is ready to offer EU citizens free movement to Britain for up to two years after Brexit under plans devised by Philip Hammond.The chancellor is understood to believe that he has the support of every cabinet minister for a transitional deal after Britain leaves the European Union in 2019. A new immigration regime would be put in place after the two-year period.Yesterday, however, it emerged that Brussels wanted to restrict the free movement of British citizens.- The Times (£) …as Brussels is accused of ‘judicial imperialism’ over EU citizens’ rights Britain has accused the European Union of judicial imperialism by demanding that the European Court of Justice enforce the rights of its citizens living in the UK after Brexit.Senior government officials said that it was “unprecedented” for another country or bloc like the EU to demand that its court be allowed to overrule judgments made in Britain. They said that agreeing to the EU’s demand would effectively give EU citizens living in the UK additional rights that British people would not enjoy.However, there was little sign yesterday that the EU was prepared to back down.- The Times (£) EU claim Britain could be thrown out of health insurance scheme… British tourists and business travellers will lose free healthcare in Europe, under hardline proposals put forward by the European Union during Brexit negotiations in Brussels. European Commission officials told their British counterparts that the UK will be thrown out of the European Health Insurance Card (EHIC) system after the 29 March 2019 withdrawal date. EHIC is a reciprocal agreement that means foreign hospitals accept that the cost of treatment for any accident will be paid by the National Health Service. – Telegraph (£) …and say British expats may face loss of free movement Britons living in the European Union would lose the right to move to another member state under hardline proposals by the EU’s Brexit negotiators. As the second round of talks concluded after four days, Michel Barnier, the EU’s chief negotiator, said “fundamental” disagreements remained and that Britain must clarify its position on a range of issues. Mr Barnier also insisted all accounts “must be settled” when the UK quits the bloc and said that he was not ready to compromise in negotiations.David Davis, the Brexit secretary, said the talks had been “robust but constructive” and urged Brussels to show “flexibility”.- The Times (£) EU demand citizens in Britain should be able to bring in non-EU spouses… The EU is demanding that its citizens living in Britain are able to marry non-EU citizens and bring those people to live with them in Britain in perpetuity and without restriction. In contrast Britain believes that they should be treated in the same way as UK citizens — who can only bring family members to the country if they have the income to support them and the person coming in successfully passes a language test… The EU says that its citizens must be able to go to the European Court of Justice to enforce their rights under the agreement.- The Times (£) …as UK plans criminal checks on current EU citizens British demands to carry out criminal records checks on every EU citizen seeking “settled status” in the U.K. after Brexit have proved a major sticking point in talks with Brussels, according to individuals familiar with the negotiations. The first full round of Brexit talks ended Thursday after four days with no major breakthrough on the thorniest issues, including the U.K.’s Brexit bill and the rights of EU citizens living in the U.K. and British expats living in EU countries.A British plan to check the U.K. criminal record of each EU citizen who applies to the Home Office was a major source of friction, one EU diplomat said. – Politico Brussels negotiators want Britain to drop plans to carry out criminal record checks on more than three million EU citizens who can apply to settle here permanently after Brexit. Under British proposals, everyone from an EU country who wanted to stay would be checked to ensure that they did not have a serious criminal past. It is understood that the government is happy for Britons living in Europe to be subjected to the same test.During three days of technical talks on citizens’ rights, however, British sources said it became clear that the EU was unhappy with its proposal. – The Times (£) Davis insists criminal checks will go ahead – Telegraph (£) Barnier: Don’t use Brexit to slash taxes and red tape The EU’s chief Brexit negotiator has fired a warning shot across any British attempt to slash red tape after it leaves the bloc, saying mass deregulation would scupper hopes of a lasting trade deal with EU member states. Transcripts of Michel Barnier’s evidence to the Lords select committee earlier this month show he warned peers that EU countries would kick out against trade negotiations if Britain does not maintain a “level playing field” with its European neighbours. “It will be said that Brussels is conducting negotiations with the UK to downgrade environmental and social standards, for example, which will lead to more tax competition,” he said, in comments published yesterday. – City A.M. We’d survive without an EU deal, insists Liam Fox Liam Fox has insisted that the UK “can of course survive” crashing out of the EU without a deal after Brexit. But the international trade secretary also talked up the prospects of a comprehensive free trade agreement with the bloc once Britain had left, saying it should be “one of the easiest in human history” to agree.“We’re already beginning with zero tariffs and maximum regulatory equivalence,” he said. “The only reason we wouldn’t come to a free and open agreement is because politics gets in the way of economics.”Dr Fox said that although ministers wanted a deal, Brussels had to believe the UK would be prepared to walk away. – The Times (£) Tariff-free access to EU must be ‘priority’ in Brexit talks, says Corbyn – Express and Star Farm subsidies ‘must be earned’ says Michael Gove who wants ‘Green Brexit’ Farm subsidies will have to be earned rather than just handed out in future, the Environment Secretary Michael Gove is expected to say in a speech later. Farmers will get only get taxpayers’ cash if they agree to protect the environment and enhance rural life, he will say. The move is part of what he calls his vision for a “Green Brexit”. Farmers’ leaders were expecting a change, but want the total cash available to farms to stay the same. The current system which pays farmers based on the amount of land they own will go after Brexit, Mr Gove will promise. – BBC New Lib Dem leader Vince Cable promises an ‘exit from Brexit’ The new Liberal Democrat leader has called on pro-EU Conservative MPs to show courage and fight a hard Brexit, saying: “This process can be stopped.” Sir Vince Cable told The Independent he believed many Tories were “holding their fire” and could be persuaded to join a cross-party campaign to force Theresa May to change course. “The question is how many will be sufficiently courageous and forthright to come out,” he said, just moments after being crowned leader. – Independent Sir Vince Cable: We need an exit from Brexit – SkyNews Lib Dem leader Vince Cable’s ‘exit from Brexit’ hope – BBC Aviation given priority boarding by government in run up to Brexit Ministers have identified aviation as a “top priority” in Brexit negotiations, saying today that the government was seeking new flight rights with 44 countries to replace the EU framework governing where airlines can fly. It comes as the Department for Transport (DfT) seeks input on how to fast track improvements to UK airports in a bid to safeguard the air transport and aerospace industries that add £22bn to the UK economy each year. – City A.M. Migration policy risks being made in the dark, peers warn… UK methods of measuring immigration are “wholly inadequate” and must be improved if ministers are to take control of the issue, say peers. “Flawed” sample surveys used to calculate net migration mean ministers risk formulating policy “in the dark”, the House of Lords report concludes. The government has pledged to reduce net migration – estimated to be 248,000 in 2016 – to 100,000 or less.It says it is working to improve statistics on EU nationals in the UK. The pledge to reduce net annual migration – the difference in the number of people coming to the UK for a year or more and those leaving – to the tens of thousands was included in the 2010, 2015 and 2017 Conservative manifestos. – BBC UK unprepared for cap on migration – and cannot count it properly, warn Lords – Telegraph …as Migration Watch say thousands of non-EU ex-students are allowed to stay each year Almost 200,000 former students from outside the EU have been given the right to stay in Britain in the past seven years, according to a report published today.Between 2009 and 2015 an average of 23,300 grants allowing people to settle in the country were made every year to non-EU migrants who had arrived as students, the report from Migration Watch UK says. A further 4,000 of the grants of settlement, which are issued by the Home Office, were given to their dependants. Overall 191,000 non-EU migrants who originally arrived in the UK through the student route were allowed to settle.- The Times (£) Verhofstadt offers Britain surprise olive branch on ECJ In a conciliatory intervention the liberal MEP told peers Brussels was open to an “international agreement” on any Brexit deal which should not be “unilaterally” governed by either side. He said that whilst eurocrats will insist the ECJ “plays a role” in policing the rights of EU citizens after Brexit, they have made no demands over “the extent of it”. Mr Verhofstadt’s remarks on the issue come after his EU Commission counterpart, Michel Barnier, appeared to suggest the Efta court could play a part in breaking the impasse. – Express City firms’ confidence is sky-high as hiring rate climbs Confidence in the City has bounced back after the snap General Election, with the number of jobs rising 17 per cent in June compared to the same time last year, according to the new Robert Walters City Job Index. The figures out today found that there were more roles available in the City than this time last year. Chris Hickey, Robert Walters’ chief executive for UK, Middle East and Africa, said City hiring levels were affected June last year by the European Union referendum, and this year by the General Election called by Theresa May back in April. – City A.M. Tim Farron: It was my decision to bet the farm on Brexit Tim Farron braced himself to “go down with the ship” in the final days of the general election campaign, as private Liberal Democrat polling showed his party could be left with just three seats – excluding his own. As he prepares to step down in favour of the former business secretary Vince Cable leading the Lib Dems, Farron said he had made a conscious decision to “bet the farm” on Brexit. He said he believed he could not have handled persistent questioning about his religious beliefs any differently without “road crashing” his faith.“Seventy-two hours before the election I was told that I could lose my seat,” he said.- Guardian EasyJet upgrades profit forecast after strong Easter Budget airline EasyJet has upgraded its annual profit forecast after a strong Easter helped boost third-quarter revenues. The carrier reported a 16 per cent rise in sales to £1.39 billion for the three months to the end of June, with passenger numbers increasing by 10.8 per cent to 22.3 million. As a result, EasyJet said full-year pre-tax profits are expected to come in between £380 million and £420m, higher than earlier forecasts. – Scotsman Fraser Nelson: Government might be losing the Brexit spin battle, but it’s triumphing on substance Strictly speaking, Britain is not allowed to hold trade talks with anyone until we have left the European Union. But no one in London or Washington wants to wait that long so, on Monday, talks to establish a free-trade agreement will begin.It’s a fairly historic moment: Robert Lighthizer, the US trade representative, will meet Liam Fox to discuss what American officials describe as “ways to strengthen trade and commercial ties”. To have this happen so soon is more than any Brexiteer dared predict. Rather than be at the back of the queue, as Barack Obama had rather absurdly threatened, Britain is sneaking to the front. – Fraser Nelson for the Telegraph Tom Harris: Ignore the cries of doom. Britain will get its Brexit deal – even if it is in the final hour Ever since Theresa May’s Lancaster House speech in January, when she caused everyone in north London to choke on their decaf chai lattés by stating that “no deal is better than a bad deal”, the Four Horsemen have been cited: “And behold, I saw a blonde horse, and the name upon his forehead was Boris…” It was widely assumed, or at least hoped, that by the time the much-delayed negotiations began, the nation would have been reconciled to our departure from the EU and would have started discussing, in broadly positive terms, the future relationship the UK could have with the EU and, more importantly, the rest of the globe. Alas, polling day in the EU referendum in June 2016 turned out to be merely a bump in the road, a glitch in the long, never-ending debate about whether or not we should leave at all. Tom Harris for the Telegraph (£) Pieter Cleppe: How negotiations between the UK and the EU on Brexit financial settlement are slowly making progress At a press conference today with EU Brexit negotiator Michel Barnier and his British counterpart David Davis, it appeared that one of the biggest two sticking points remains the “financial settlement.” A closer look reveals that some progress has been made on the issue, even though we are still far from a deal. The overall amounts which are being suggested, estimated to range from 30 billion euro net to 100 billion euro gross, aren’t that gigantic in the grand scheme of things, and of course money is always useful to smooth any deal.- Pieter Cleppe for Open Europe John Redwood: Issue of UK payments is already clear I don’t understand why there is any lack of clarity on this simple subject. The UK owes our regular contributions up to the date of departure. The UK owes no contributions thereafter or special payments to leave. If they want us to stay in the EIB we can come to an agreement about our capital in that Bank. If we want to stay in Erasmus and they want us in there will be a continuing payment related to our share of Erasmus spending as a non EU member of it. Our paid up capital in the ECB is small and not a major issue. If they want us to keep our small shareholding we could. – John Redwood’s Diary Telegraph: Britain must not concede to Europe on legal jurisdiction When Britain said that it would guarantee the rights of EU citizens, it meant their right to stay in the UK under British legal jurisdiction. It did not mean their right to abide by the rulings of separate EU courts. And yet Michel Barnier, the chief EU negotiator, calls the latter an “obligation” that Britain must meet. Not only would it be perverse to allow EU nationals a separate set of rights, but the suggestion is also an insult. Our laws are not second class to Europe’s. If anything, they are far more enlightened. – Telegraph editorial (£) Aarti Shankar: Michel Barnier is wrong to think the clock only ticks for Britain The gap between the negotiating positions of the UK and EU does not appear to have narrowed much following this second round of negotiations. Two points of contention continue to dominate the discussion: on citizens’ rights, both the UK and the EU found much common ground, but the question of the European Court of Justice’s (ECJ) role in enforcing the agreement continues to hinder progress. On the issue of the UK’s financial settlement, very little movement is evident. – Aarti Shankar for the Telegraph Asa Bennett: The EU may now take Brexit seriously, but that doesn’t mean it will avoid petty point-scoring David Davis wound up the second round of negotiations this week over Britain’s terms of withdrawal from the European Union by speaking at a joint press conference alongside his “friend” Michel Barnier.Both men made sure to bring their papers. The Brexit Secretary had no doubt not forgotten the trick Team Barnier tried to play on his side at the start of the week, bringing reams of documents to what was reportedly meant to be a quick “welcome” meeting in front of the cameras so as to make them look like shambolic amateurs. – Asa Bennett for the Telegraph Brexit comment in brief Trade deal offers show post-Brexit world is our oyster – Joseph Hackett for the Commentator UK Retail sales rise – John Redwood’s Diary The Hinkley Point fiasco doesn’t bode well for Brexit – Rupert Darwall for CapX Uganda shows the power of the free market in action – Daniel Hannan MEP for ConservativeHome Doctor, doctor, I’m upset about Brexit – Fraser Myers for Spiked Our plans to secure our borders while welcoming skilled migrants – Brandon Lewis for ConservativeHome David Davis is having un petit peu de bother – Michael Deacon for the Telegraph If anything can halt capitalism’s fat cats, it’s Brexit – Larry Elliott for the Guardian Economic gloom-mongering? Tosh. We’re booming – Rory Broomfield for CommentCentral Dear Leavebugs, it’s time to admit your mistake – Matthew Parris for the Spectator Brexit news in brief Germans accuse Turkey over arrest of human rights man – The Times (£) Theresa May to take a three-week summer holiday, away from Brexit and her MPs – Huffington Post Fund managers told to raise their game after Brexit – The Times (£) Date set for Commons debate on EU withdrawal – The Scotsman Government delays starting work on the UK’s post-Brexit border system – The Sun Liam Fox on Chopper’s Brexit Podcast – Telegraph Remain champion Damian Green is suddenly everywhere – The Times (£)