Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team British officials say May’s Brexit budget offer is conditional on trade The U.K. will leave a 20 billion euro ($23 billion) hole in the European Union’s budget unless the bloc agrees to give Theresa May the sweeping Brexit trade deal she wants, according to senior British officials. Britain won’t fulfill May’s offer to cover the U.K.’s share of the EU budget through 2020 without a broader Brexit deal, said the officials, speaking on condition of anonymity. The U.K. also hasn’t accepted that it’s liable for a share of the pensions of EU staff, they said… A spokesperson for the Brexit Department said the financial settlement should be “in accordance with law and in the spirit of the U.K.’s continuing partnership with the EU.” – Bloomberg Philip Hammond backs a Brexit transition period longer than two years… British Chancellor Philip Hammond signalled today that the U.K.’s proposed transition period may last longer than two years as the country adapts to post-Brexit life. “There’s some room for flexibility” with the length of the period, Hammond told BBC Radio 4‘s Today program, to guarantee a smooth transition and “certainty” for businesses. He also dismissed fellow cabinet minister Boris Johnson’s comments that the transition period must not be extended “a second longer.” Hammond said this was just “a rhetorical flourish.” Hammond also revealed that he personally thought the transition period should have been “between three and four years,” but said “around two years works for everybody.” – Politico …as he rebukes Boris Johnson, saying no one is ‘unsackable’… Philip Hammond has delivered a clear rebuke to Boris Johnson for “downplaying” the complexities of Brexit as he continued his feud with the Foreign Secretary… Mr Hammond, speaking a day before Mr Johnson makes his own conference speech, said Britain will remain “closely linked with the EU” following Brexit, and stressed the need for a “careful and cautious” negotiation… Mr Johnson believes Britain should be prepared to leave the EU without a deal, and has suggested too many of his colleagues are downplaying the benefits of leaving the EU. Mr Hammond took the opposite approach in his speech, saying: “If we get this right – Britain will have a bright future beyond Brexit. But to get to it, we must be clear-eyed about the challenges along our way.” – Telegraph (£) Cabinet is split over how Brexit should happen, Hammond admits – Guardian Boris Johnson styles himself as ‘godfather of Brexit’ – FT (£) Theresa May won’t make Boris a ‘martyr’ by sacking him – Daily Mail The PM can’t sack Boris Johnson – Beth Rigby for Sky News …while Boris is reportedly forced into a climbdown on transitional period Boris Johnson back-pedalled yesterday over his moves to disrupt a Brexit transition deal after huge pressure from senior Tory colleagues and business groups. The foreign secretary made clear that he would not stand in the way of a transition deal on similar terms to existing EU membership, having previously put down restrictions that would have jeopardised such an arrangement… Mr Gove, the environment secretary, is not expected to join a revolt on the terms of the transition deal. He is more likely to dig in if the cabinet tries to tie Britain’s future rules to those of the EU to ensure market access… Mrs May has ruled out sacking Mr Johnson to prevent him becoming a “martyr” on the back benches. – The Times (£) Boris Johnson’s impatience over Brexit masks a fear of delay – once Britain falls into a midway membership zone, the chances of ever leaving wane – Janan Ganesh for the FT (£) Pro-EU think tank calls for two back-to-back transition periods – Bloomberg A Brexit transition fails to dodge the perils of leaving the EU – Nick Clegg for the FT (£) David Davis ‘plans to retire’ as Brexit Secretary when the UK leaves the EU in 2019 David Davis plans to retire in 2019 and leave Boris Johnson to steer the UK through the transitional period, The Telegraph can reveal. The Brexit secretary told friends that Michel Barnier, the EU’s chief negotiator, “needs this to work more than I do” because he plans to step aside in June 2019 whereas Mr Barnier will still be in post. Mr Davis believes Brexit will be his “last big job”, friends told this newspaper. Meanwhile Boris Johnson told Conservative activists that Brussels believes Britain will “bottle it” over Brexit. – Telegraph David Davis sparks Cabinet turmoil over his plans to quit and pass Brexit responsibilities on to Boris Johnson once UK leaves the EU – The Sun David Davis is ‘interested in becoming Prime Minister’ after Britain leaves the EU – Express Michael Gove vows to stop ‘subsidising’ rich landowners with post-Brexit farmer funding shake-up The Environment Secretary said the European Union’s Common Agricultural Policy (CAP) was “plain wrong” because it rewarded the “already wealthy, simply because of the amount of land they have”. Mr Gove suggested the replacement system, which will be introduced once Britain has left the bloc, will focus on “enhancing the environment” and “supporting innovation”… The Government has promised to match the £3 billion that farmers currently receive in support from the CAP post-Brexit until 2022 but future funding arrangements have not yet been set out. – Telegraph Michael Gove blames EU for dramatic decline of wildlife as he pledges ‘green Brexit’ – Independent Liam Fox slams the BBC over their anti-Brexit bias — and accuses them of only broadcasting negative stories Liam Fox launched another attack on the BBC – claiming it was trying to make Brexit a disaster by broadcasting negative stories. The International Trade Secretary said he was sick of the “self-defeating pessimism” of media outlets like the BBC and the Financial Times. Senior Tory backbencher Jacob Rees-Mogg also vented anger at the BBC’s “absolutely appalling” coverage since last year’s Brexit vote. – The Sun Post-Brexit immigration white paper delayed until late autumn The government white paper on post-Brexit immigration policy, a draft of which was leaked to the Guardian in August, will not now be published until “late autumn”, the immigration minister, Brandon Lewis, has told a Conservative fringe meeting. Lewis confirmed that the final version will include a commitment that freedom of movement for EU migrants will end in March 2019 – on Brexit day – but revealed that the key details of the new immigration policy, one of the most controversial areas of cabinet splits, will not emerge until next autumn, just months before Britain leaves the EU. “We will be publishing a white paper later this autumn … There will be an immigration bill in the new year setting out the framework,” said Lewis. – Guardian Vince Cable accuses Government of failing to condemn Spain over Catalonia violence because they’re worried about landing a Brexit deal The Cabinet was yesterday accused of failing to condemn Spain over the crackdown in Catalonia – because they’re too worried about landing a Brexit deal. Amid spiraling anger at Madrid’s brutal intervention on Sunday, Lib Dem chief Vince Cable said Boris Johnson was guilty of a “shameful dereliction of duty” for not criticising the Madrid government.… The row came as Brussels booted Barcelona out of the running to house the London-based EU Medicines Agency post Brexit. In a move taken as punishment for the referendum chaos, the Catalan city was ditched from the shortlist to bag the EU drugs regulator. – The Sun As Spain falls apart, Europe is tongue-tied – Politico The EU can’t stop people’s desire for nationhood – Tim Stanley for the Telegraph (£) If David Cameron had treated Scotland like Spain treats Catalonia, even I might have voted Yes – Tom Harris for the Telegraph (£) The Spanish leader must work for a compromise with the Catalans or step aside – The Times editorial (£) Andrew Lilico: The Government is being dangerously vague about what a Brexit ‘transition’ would actually mean It is vital that transition be complete before the next General Election in mid-2022… Suggestions attributed to Philip Hammond of a five-year transition are far too long to avoid this risk. Furthermore, in that bridging period we should be demonstrating progress in withdrawal, piece by piece, coming out of the CAP and CFP early (in 2020), out of free movement next (perhaps in 2021), and out of ECJ jurisdiction… That is the only way to ensure that “transition” does not become an endless limbo which traps us in the institution we have voted decisively to leave. – Andrew Lilico for the Telegraph (£) John Longworth: If the Tories won’t champion business and enterprise, who will? If any of these parties are to regain the respect of the 85 per cent of the population who voted to leave the single market at the last election, or the 70 per cent who say in the polls that we should get on and Brexit, and if necessary leave with no deal, then that is what they should do. In so doing, the aim should be to make us wealthier as a nation than we would have been by staying in the EU. This is entirely within the gift of the government, but they must stop obsessing about a free trade agreement and instead concentrate on realising the real benefits of Brexit. They must ignore the vested interests and put the nation first. They must be resolute and have courage. They must make the case for a new model economy. – John Longworth for the Spectator Matthew Goodwin: Is there still space in British politics for a Ukip-style party? While Ukip might fail to reverse its decline, it is worth reflecting on a series of recent findings that point to continuing room for populists in Britain. First, there is a clear constituency of voters who would support a “Brexit betrayal” type party… There are deeper currents, too. Other research suggests that wider public dissatisfaction with the functioning of Britain’s political system is on the rise, and that public distrust of politics has been fuelled by the failure of the main parties to meet their promises on immigration. – Matthew Goodwin for The Times (£) Brexit in brief The Brexit cup is not half empty but very nearly full – Christopher Howarth for ConservativeHome A ‘5-2 diet’ is better than starving exports over Brexit – Nick Allen for the Telegraph (£) Will Merkel and Macron ever agree on eurozone reform? – Dalibor Rohac for CapX Minister Phillip Lee claims the Prime Minister lacks a ‘mandate’ for her original vision of Brexit – Independent Amber Rudd hires Tory pollster Lynton Crosby amid talk of bid for leadership – The Times (£)